US (United States) Code. Title 12. Chapter 14: Federal Credit Unions

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # Banks and banking

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12 USC CHAPTER 14 - FEDERAL CREDIT UNIONS 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

.

-HEAD-

CHAPTER 14 - FEDERAL CREDIT UNIONS

-MISC1-

Sec.

1751. Short title.

1751a. Omitted.

SUBCHAPTER I - GENERAL PROVISIONS

1752. Definitions.

1752a. National Credit Union Administration.

(a) Establishment; management under National Credit

Union Administration Board.

(b) Membership and appointment of Board.

(c) Term of office.

(d) Management of Administration vested in Board;

adoption of rules; quorum; report to President

and Congress.

(e) Functions of Chairman.

(f) Audit by General Accounting Office.

1753. Federal credit union organization.

1754. Approval of organization certificate.

1755. Fees.

(a) Payment by Federal credit union to

Administration.

(b) Determinations of amount, assessment periods, and

payment dates.

(c) Supervision charge exception; waiver of payment.

(d) Payment into Treasury of United States.

(e) Investment of annual operating fees not needed

for current operations.

1756. Reports and examinations.

1756a. Omitted.

1757. Powers.

1757a. Limitation on member business loans.

(a) In general.

(b) Exceptions.

(c) Definitions.

(d) Effect on existing loans.

(e) Consultation and cooperation with State credit

union supervisors.

1758. Bylaws.

1759. Membership.

(a) In general.

(b) Membership field.

(c) Exceptions.

(d) Multiple common-bond credit union group

requirements.

(e) Additional membership eligibility provisions.

(f) Criteria for approval of expansion of multiple

common-bond credit unions.

(g) Regulations required for community credit unions.

1760. Members' meetings.

1761. Management.

(a) Board of directors, credit committee, and

supervisory committee; election to board.

(b) Membership on supervisory committee; names and

addresses of officers and committee members.

(c) Compensation.

1761a. Officers of the board.

1761b. Board of directors; meetings; powers and duties; executive

committee; membership officers; membership application.

1761c. Credit committee.

(a) Members; meetings; lines of credit and approval

of loans; delegation to loan officers.

(b) Review and reversal of loan refusals; review by

board in lieu of committee; limitation on

disbursements by loan officers.

1761d. Supervisory committee; powers and duties; suspension of

members; passbook.

1762. Repealed.

1763. Dividends.

1764. Expulsion and withdrawal.

(a) Expulsion by two-thirds vote.

(b) Expulsion based on nonparticipation.

(c) Liability to credit union.

1765. Minors.

1766. Powers of Board.

1767. Fiscal agents and depositories; authorization to secure

deposits by governmental bodies.

1768. Taxation.

1769. Separability; right to alter, amend, or repeal chapter.

1770. Allotment of space in Federal buildings.

1771. Conversion from Federal to State credit union and from State

to Federal credit union.

1772. Territorial application of chapter.

1772a. Gifts; acceptance of conditional gifts; deposit.

1772b. Apportionment.

1772c. Trust fund.

1772c-1. Community development revolving loan fund for credit

unions.

(a) In general.

(b) Investment.

(c) Loans.

(d) Interest.

(e) ''Fund'' defined.

1772d. Forfeiture of organization certificate for money laundering

or cash transaction reporting offenses.

(a) Forfeiture of franchise for money laundering or

cash transaction reporting offenses.

(b) Factors to be considered.

(c) Successor liability.

1773. District of Columbia credit unions; conversion to Federal

status.

1774. Approval of certificate; assets and obligations of applicant

credit union.

1775. Conditions upon conversion to Federal status.

SUBCHAPTER II - SHARE INSURANCE

1781. Insurance of member accounts.

(a) Eligibility.

(b) Application; agreement.

(c) Approval of application.

(d) Certificate of insurance.

(e) Prohibition on certain associations.

1782. Administration of insurance fund.

(a) Reports of condition.

(b) Certified statement.

(c) Deposit with National Credit Union Share

Insurance Fund; amount, return, distribution,

etc.

(d) Remedy for failure to report; penalty for failure

to file certified statement or pay premium;

dispute as to deposit or premium charge;

prohibition on distribution of assets or

dividends while in default.

(e) Recovery of unpaid deposit or premium;

limitations.

(f) Penalty for failure to comply with section; court

determination of failure; remedies not

exclusive.

(g) Records.

(h) Definitions.

1783. National Credit Union Share Insurance Fund.

(a) Creation; use of fund.

(b) Deposit of deposits and premium charges, fees and

penalties.

(c) Investment authorization.

(d) Loans to fund, limitation and terms; interest

accrual; determination of interest rate.

(e) Excess funds credited against loans.

(f) Authorization for fund to borrow from Central

Liquidity Facility.

1784. Examination of insured credit unions.

(a) Examiners and claim agents; powers; report by

examiner; jurisdiction of court.

(b) Power of Board; jurisdiction of court.

(c) Court orders enforcing subpenas; immunity.

(d) Administration acceptance of State board reports;

reports of Board furnished to State board.

(e) Flood insurance compliance by insured credit

unions.

(f) Access to liquidity.

(g) Sharing information with Federal reserve banks.

1785. Requirements governing insured credit unions.

(a) Advertisement of insured status; exemptions;

regulation of signs.

(b) Restrictions.

(c) Considerations for waiver or enforcement of

restrictions.

(d) Prohibition.

(e) Security standards; reports; penalty.

(f) Share draft accounts; maintenance, loans, etc.

(g) Interest rates.

(h) Emergency merger.

(i) Emergency purchase of assets; conversion to

insured deposits.

1786. Termination of insured credit union status; cease and desist

orders; removal or suspension from office; procedure.

(a) Termination of insurance.

(b) Unsound condition of credit union; notice to

correct condition; hearing; judicial review.

(c) Notice to members of termination of insured

status.

(d) Continuation of insurance for one year; approval

of conversion of status; procedure subsequent

to approval; reduction of premium charges.

(e) Opinion of Board as to unsound condition of

credit union; notice of charges; hearing; order

to cease and desist; judicial review.

(f) Temporary cease and desist order; injunctive

procedure.

(g) Removal and prohibition authority.

(h) Board's appointment of conservator; consultation

with State; authority.

(i) Suspension or removal of institution-affiliated

party charged with crime.

(j) Jurisdiction of hearing; procedure; judicial

review.

(k) Jurisdiction and enforcement; penalty.

(l) Criminal penalty for violation of certain orders.

(m) Definitions.

(n) Notice or order to State board supervising

State-chartered credit union.

(o) Notice of proceedings to State board supervising

State-chartered credit union; effect of

corrective action by State board; attack on

validity of notice or order.

(p) Proceedings; powers of Board; court enforcement

of subpenas; witness fees; expenses and

attorneys' fees.

(q) Compliance with monetary transaction

recordkeeping and report requirements.

(r) ''Institution-affiliated party'' defined.

(s) Public disclosure of agency action.

(t) Regulation of certain forms of benefits to

institution-affiliated parties.

(u) Foreign investigations.

(v) Termination of insurance for money laundering or

cash transaction reporting offenses.

1786a. Regulation and examination of credit union organizations and

service providers.

(a) Regulation and examination of credit union

organizations.

(b) Applicability of section 1786.

(c) Service performed by contract or otherwise.

(d) Administration by Board.

(e) Definitions.

(f) Expiration of authority.

1787. Payment of insurance.

(a) Liquidation by Board; bond; appointment of agent;

fees to be fixed by Board.

(b) Powers and duties of Board as conservator or

liquidating agent.

(c) Provisions relating to contracts entered into

before appointment of conservator or

liquidating agent.

(d) Payment of insured deposits.

(e) Subrogation of Board.

(f) Valuation of claims in default.

(g) Limitation on court action.

(h) Liability of directors and officers.

(i) Damages.

(j) Board as liquidating agent of State-chartered

credit unions.

(k) Extent of insurance coverage; insurance of public

funds; insurance regarding pension and

profit-sharing plans.

(l) Payment; discharge of liability.

(m) Undisclosed names.

(n) Withholding of payment due to liability of credit

union member.

(o) Unclaimed insured accounts; limitations.

(p) Sale of assets; security for loans; approval of

court; agreements affecting interest of Board

in any asset acquired by it.

(q) Prohibition on certain acquisitions of assets.

(r) Foreign investigations.

1788. Special assistance to avoid liquidation.

(a) Loans; purchase of assets; accounts; agreements

affecting interest of Board in any asset

acquired by it.

(b) Protection of Fund.

(c) Money paid into Fund.

1789. Administrative provisions.

1789a. Credit unions as depositaries of public money; fiscal

agents; duties.

1790. Nondiscriminatory provision.

1790a. Board disapproval of directors, committee members, and

senior executive officers of insured credit unions.

(a) Prior notice required.

(b) Disapproval by Board.

(c) Exception in extraordinary circumstances.

(d) Additional information.

(e) Standard for disapproval.

(f) Definition regulations.

1790b. Credit union employee protection remedy.

(a) In general.

(b) Enforcement.

(c) Remedies.

(d) Limitations.

1790c. Reward for information leading to recoveries or civil

penalties.

1790d. Prompt corrective action.

(a) Resolving problems to protect Fund.

(b) Regulations required.

(c) Net worth categories.

(d) Risk-based net worth requirement for complex

credit unions.

(e) Earnings-retention requirement applicable to

credit unions that are not well capitalized.

(f) Net worth restoration plan required.

(g) Restrictions on undercapitalized credit unions.

(h) More stringent treatment based on other

supervisory criteria.

(i) Action required regarding critically

undercapitalized credit unions.

(j) Review required when Fund incurs material loss.

(k) Appeals process.

(l) Consultation and cooperation with State credit

union supervisors.

(m) Corporate credit unions exempted.

(n) Other authority not affected.

(o) Definitions.

SUBCHAPTER III - CENTRAL LIQUIDITY FACILITY

1795. Congressional findings.

1795a. Definitions.

1795b. National Credit Union Administration Central Liquidity

Facility; establishment; management; jurisdiction.

1795c. Membership.

(a) Credit unions serving natural persons.

(b) Credit unions serving other credit unions.

(c) Stock subscription requirements.

(d) Functions of Agent members of Facility.

(e) Withdrawal from or termination of membership.

1795d. Capital stock.

(a) Opening of books; minimum subscription.

(b) Requirements.

(c) Redemption of stock.

(d) Use of subscription amount.

(e) Restriction on advances to credit unions.

1795e. Extensions of credit.

1795f. Powers of Board.

(a) General authorities.

(b) Collection and settlement of checks, share

drafts, etc.; charges; rules and regulations.

1795g. Depositories, custodians, and fiscal agents.

1795h. Audit of financial transactions.

1795i. Annual report.

1795j. Agent of Federal Reserve System.

1795k. State and local tax exemption.

(a) Franchise, activities, etc., of Central Liquidity

Facility; exception.

(b) Notes, bonds, debentures and other obligations of

Central Liquidity Facility; exceptions.

(c) ''State'' defined; tax status.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 1818, 1831k, 1831t, 2804,

4009, 4309, 4742, 4909 of this title; title 7 section 2019; title

15 sections 1607, 1681s, 1691c, 1692l, 1693o, 6505, 6805, 6822;

title 18 section 709; title 42 section 5318a.

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12 USC Sec. 1751 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

-HEAD-

Sec. 1751. Short title

-STATUTE-

This chapter may be cited as the ''Federal Credit Union Act''.

-SOURCE-

(June 26, 1934, ch. 750, Sec. 1, 48 Stat. 1216; Pub. L. 86-354,

Sec. 1, Sept. 22, 1959, 73 Stat. 628.)

-MISC1-

AMENDMENTS

1959 - Pub. L. 86-354 reenacted section without change.

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TRANSFER OF FUNCTIONS

Secretary and Department of Health, Education, and Welfare

redesignated Secretary and Department of Health and Human Services

by section 3508 of Title 20, Education.

Transfer of functions of Farm Credit Administration and Governor

thereof to Bureau of Farm Credit Unions and Director thereof under

jurisdiction of Federal Security Agency by act June 29, 1948, ch.

711, Sec. 1, 2, 62 Stat. 1091, and abolishment of Agency and

transfer of its functions to Department of Health, Education, and

Welfare by Reorg. Plan No. 1 of 1953, Sec. 5, eff. Apr. 11, 1953,

18 F.R. 2053, 67 Stat. 632, see section 1752a of this title, and

notes thereunder.

Functions of Farm Credit Administration and Governor thereof

under this chapter, together with functions of Secretary of

Agriculture with respect thereto, transferred to Federal Deposit

Insurance Corporation by Reorg. Plan No. 1 of 1947, Sec. 401, eff.

July 1, 1947, 12 F.R. 4534, 61 Stat. 952, set out in the Appendix

to Title 5, Government Organization and Employees. A similar

transfer of functions for duration of World War II was effected by

Ex. Ord. No. 9148, Apr. 27, 1942, 7 F.R. 3145.

Farm Credit Administration transferred to Department of

Agriculture by Reorg. Plan No. I of 1939, Sec. 401, eff. July 1,

1939, 4 F.R. 2730, 53 Stat. 1429, set out in the Appendix to Title

5.

-MISC5-

SHORT TITLE OF 1998 AMENDMENT

Pub. L. 105-219, Sec. 1(a), Aug. 7, 1998, 112 Stat. 913, provided

that: ''This Act (enacting sections 1757a and 1790d of this title,

amending sections 1752a, 1759, 1782, and 1784 to 1787 of this

title, repealing section 1762 of this title, and enacting

provisions set out as notes under this section and sections 1752a,

1757a, 1759, 1790d, 4801, and 4803 of this title) may be cited as

the 'Credit Union Membership Access Act'.''

SHORT TITLE OF 1987 AMENDMENT

Pub. L. 100-86, title VII, Sec. 701, Aug. 10, 1987, 101 Stat.

652, provided that: ''This title (enacting section 1772c of this

title and amending sections 1757, 1761a, 1761b, 1764, 1766, 1767,

and 1786 to 1788 of this title and sections 45, 46, and 57a of

Title 15, Commerce and Trade) may be cited as the 'Credit Union

Amendments of 1987'.''

SHORT TITLE OF 1978 AMENDMENT

Pub. L. 95-630, title XVIII, Sec. 1801, Nov. 10, 1978, 92 Stat.

3719, provided that: ''This title (enacting subchapter III of this

chapter and amending section 1757 of this title, section 709 of

Title 18, Crimes and Criminal Procedure, and section 856 of former

Title 31, Money and Finance) may be cited as the 'National Credit

Union Central Liquidity Facility Act'.''

CONGRESSIONAL FINDINGS

Pub. L. 105-219, Sec. 2, Aug. 7, 1998, 112 Stat. 913, provided

that: ''The Congress finds the following:

''(1) The American credit union movement began as a cooperative

effort to serve the productive and provident credit needs of

individuals of modest means.

''(2) Credit unions continue to fulfill this public purpose,

and current members and membership groups should not face

divestiture from the financial services institution of their

choice as a result of recent court action.

''(3) To promote thrift and credit extension, a meaningful

affinity and bond among members, manifested by a commonality of

routine interaction, shared and related work experiences,

interests, or activities, or the maintenance of an otherwise

well-understood sense of cohesion or identity is essential to the

fulfillment of the public mission of credit unions.

''(4) Credit unions, unlike many other participants in the

financial services market, are exempt from Federal and most State

taxes because they are member-owned, democratically operated,

not-for-profit organizations generally managed by volunteer

boards of directors and because they have the specified mission

of meeting the credit and savings needs of consumers, especially

persons of modest means.

''(5) Improved credit union safety and soundness provisions

will enhance the public benefit that citizens receive from these

cooperative financial services institutions.''

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12 USC Sec. 1751a 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

-HEAD-

Sec. 1751a. Omitted

-COD-

CODIFICATION

Section, act June 29, 1948, ch. 711, Sec. 2, 62 Stat. 1091,

related to establishment of Bureau of Federal Credit Unions. See

section 1752a of this title.

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12 USC SUBCHAPTER I - GENERAL PROVISIONS 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

.

-HEAD-

SUBCHAPTER I - GENERAL PROVISIONS

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in sections 1781, 1782, 1795f of

this title.

-CITE-

12 USC Sec. 1752 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1752. Definitions

-STATUTE-

As used in this chapter -

(1) the term ''Federal credit union'' means a cooperative

association organized in accordance with the provisions of this

chapter for the purpose of promoting thrift among its members and

creating a source of credit for provident or productive purposes;

(2) the term ''Chairman'' means the Chairman of the National

Credit Union Administration Board;

(3) the term ''Administration'' means the National Credit Union

Administration;

(4) the term ''Board'' means the National Credit Union

Administration Board;

(5) The terms ''member account'' and ''account'' mean a share,

share certificate, or share draft account account (FOOTNOTE 1) of

a member of a credit union of a type approved by the Board which

evidences money or its equivalent received or held by a credit

union in the usual course of business and for which it has given

or is obligated to give credit to the account of the member, and,

in the case of a credit union serving predominantly low-income

members (as defined by the Board), such terms (when referring to

the account of a nonmember served by such credit union) mean a

share, share certificate, or share draft account account

(FOOTNOTE 1) of such nonmember which is of a type approved by the

Board and evidences money or its equivalent received or held by

such credit union in the usual course of business and for which

it has given or is obligated to give credit to the account of

such nonmember, and such terms mean share, share certificate, or

share draft account accounts (FOOTNOTE 2) of nonmember credit

unions and nonmember units of Federal, State, or local

governments and political subdivisions thereof enumerated in

section 1787 of this title, and such terms mean custodial

accounts established for loans sold in whole or in part pursuant

to section 1757(13) of this title: Provided, That for purposes of

insured State credit unions, reference in this paragraph to

''share'', ''share certificate'', or ''share draft'', accounts

includes, as determined by the Board, the equivalent of such

accounts under State law;

(FOOTNOTE 1) So in original. Probably should be ''or share

draft account''.

(FOOTNOTE 2) So in original. Probably should be ''or share

draft accounts''.

(6) The terms ''State credit union'' and ''State-chartered

credit union'' mean a credit union organized and operated

according to the laws of any State, the District of Columbia, the

several territories and possessions of the United States, the

Panama Canal Zone, or the Commonwealth of Puerto Rico, which laws

provide for the organization of credit unions similar in

principle and objectives to Federal credit unions;

(7) The term ''insured credit union'' means any credit union

the member accounts of which are insured in accordance with the

provisions of subchapter II of this chapter, and the term

''noninsured credit union'' means any credit union the member

accounts of which are not so insured;

(8) The term ''Fund'' means the National Credit Union Share

Insurance Fund; and

(9) The term ''branch'' includes any branch credit union,

branch office, branch agency, additional office, or any branch

place of business located in any State of the United States, the

District of Columbia, the several territories, including the

trust territories, and possessions of the United States, the

Panama Canal Zone, or the Commonwealth of Puerto Rico, at which

member accounts are established or money lent. The term

''branch'' also includes a suboffice, operated by a Federal

credit union or by a credit union authorized by the Department of

Defense, located on an American military installation in a

foreign country or in the trust territories of the United States.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 101, formerly Sec. 2, 48

Stat. 1216; 1947 Reorg. Plan No. 1, Sec. 401, eff. July 1, 1947,

12 F.R. 4534, 61 Stat. 952; June 29, 1948, ch. 711, Sec. 1, 2, 62

Stat. 1091; Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat. 628;

Pub. L. 91-206, Sec. 1, Mar. 10, 1970, 84 Stat. 49, renumbered

title I, Sec. 101, and amended Pub. L. 91-468, Sec. 1(2), 2, Oct.

19, 1970, 84 Stat. 994, 1015; Pub. L. 95-22, title III, Sec. 308,

Apr. 19, 1977, 91 Stat. 52; Pub. L. 95-630, title V, Sec. 502(a),

(b), 503, Nov. 10, 1978, 92 Stat. 3681; Pub. L. 96-161, title I,

Sec. 103(a), Dec. 28, 1979, 93 Stat. 1233; Pub. L. 96-221, title

III, Sec. 305(a), 307, Mar. 31, 1980, 94 Stat. 146, 147; Pub. L.

97-320, title V, Sec. 501, Oct. 15, 1982, 96 Stat. 1528.)

-REFTEXT-

REFERENCES IN TEXT

For definition of Canal Zone, referred to in text, see section

3602(b) of Title 22, Foreign Relations and Intercourse.

-MISC2-

AMENDMENTS

1982 - Par. (5). Pub. L. 97-320 inserted '', and such terms mean

custodial accounts established for loans sold in whole or in part

pursuant to section 1757(13) of this title'' after ''section 1787

of this title''.

1980 - Par. (5). Pub. L. 96-221, Sec. 305(a), 307, inserted

provisions respecting applicability to share draft accounts

substantially similar to provisions added by Pub. L. 96-161, and

repealed the amendment made by Pub. L. 96-161. See Repeals and

Effective Date of 1980 Amendment notes below.

Par. (10). Pub. L. 96-221, Sec. 307, struck out par. (10) which

defined ''share draft account''. See Repeals and Effective Date of

1980 Amendment notes below.

1979 - Par. (5). Pub. L. 96-161, Sec. 103(a)(1), inserted '', and

such term also includes a share draft account'' after ''the

equivalent of such accounts under State law''.

Par. (10). Pub. L. 96-161, Sec. 103(a)(2)-(4), added par. (10).

1978 - Par. (2). Pub. L. 95-630, Sec. 502(a)(1), substituted

provisions defining ''Chairman'' for provisions defining

''Administrator''.

Par. (4). Pub. L. 95-630, Sec. 502(a)(2), inserted

''Administration'' after ''National Credit Union''.

Par. (5). Pub. L. 95-630, Sec. 502(b), 503(a), (b), redesignated

par. (4), defining ''member account'' and ''account'', as (5) and

substituted ''share or share certificate'' for ''share, share

certificate, or share deposit'' in two places; ''Board'' for

''Administrator'' wherever appearing; ''share or share certificate

accounts'' for ''those accounts''; and ''enumerated in section 1787

of this title: Provided, That for purposes of State credit unions,

reference in this paragraph to 'share' or 'share certificate'

accounts includes, as determined by the Board, the equivalent of

such accounts under State law;'' for ''in which payments are

received by a credit union pursuant to section 1757(6) of this

title;''.

Pars. (6) to (8). Pub. L. 95-630, Sec. 503(a), redesignated

former pars. (5) to (7) as (6) to (8). Former par. (8) redesignated

(9).

Par. (9). Pub. L. 95-630, Sec. 503(a), (c), redesignated former

par. (8) as (9), inserted '', including the trust territories,''

after ''several territories'', and inserted provision that term

''branch'' also includes a suboffice, operated by a Federal credit

union or by a credit union authorized by the Department of Defense,

located on an American military installation in a foreign country

or in the trust territories of the United States.

1977 - Par. (4). Pub. L. 95-22 inserted provision that such terms

mean those accounts of nonmember credit unions and nonmember units

of Federal, State, or local governments and political subdivisions

thereof in which payments are received by a credit union pursuant

to section 1757(6) of this title.

1970 - Par. (2). Pub. L. 91-206 substituting ''Administrator'' as

meaning Administrator of the National Credit Union Administration

for ''Bureau'' as meaning the Bureau of Federal Credit Unions.

Par. (3). Pub. L. 91-206 substituted ''Administration'' as

meaning the National Credit Union Administration for ''Director''

as meaning Director of the Bureau of Federal Credit Unions.

Par. (4). Pub. L. 91-206 added par. (4).

Pars. (4) to (8). Pub. L. 91-468, Sec. 2, added pars. (4) to (8).

1959 - Pub. L. 86-354 designated the terms defined as subsecs.

(1) to (3).

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-221 effective at close of Mar. 31, 1980,

see section 306 of Pub. L. 96-221, set out as a note under section

371a of this title.

EFFECTIVE AND TERMINATION DATES OF 1979 AMENDMENT

Amendment by Pub. L. 96-161 effective Dec. 31, 1979, with that

amendment to remain in effect until the close of Mar. 31, 1980, see

section 104 of Pub. L. 96-161, set out as a note under section 371a

of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Section 509 of title V of Pub. L. 95-630 provided that: ''The

amendments made by this title (amending this section, sections 1753

to 1756, 1757 to 1759, 1761 to 1763, 1766, 1767, 1771, 1772a, and

1781 to 1789 of this title, and sections 5108, 5314, and 5315 of

Title 5, Government Organization and Employees) take effect upon

the effective date of this Act (see Effective Date note under

section 375b of this title), except that the functions of the

Administrator of the National Credit Union Administration under the

provisions of the Federal Credit Union Act (this chapter), as in

effect on the date preceding the date of enactment of this title

(Nov. 10, 1978), shall continue to be performed by him in

accordance with such provisions until such time as all the members

of the National Credit Union Administration Board, established

under the amendments made by this title, take office. All rules,

regulations, policies, and procedures of the Administrator in

effect on the date of enactment of this title shall remain in

effect until amended, superseded, or repealed.''

REPEALS

Amendment by section 103 of Pub. L. 96-161, cited as a credit to

this section, was repealed at the close of Mar. 31, 1980, by

section 307 of Pub. L. 96-221, and substantially identical

provisions were enacted by section 305 of Pub. L. 96-221, such

amendments to take effect at the close of Mar. 31, 1980.

-TRANS-

TRANSFER OF FUNCTIONS

Transfer of functions of Farm Credit Administration and Governor

thereof, see notes set out under section 1751 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 461, 1422, 1715z-14,

1735f-7a, 1786, 1818, 1831t, 3350, 4702, 4801 of this title; title

7 sections 1a, 27; title 11 section 101; title 15 sections 78c,

1679a; title 18 section 2113; title 22 section 5426; title 26

sections 408, 501; title 31 section 3342; title 42 sections 669a,

6901.

-CITE-

12 USC Sec. 1752a 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1752a. National Credit Union Administration

-STATUTE-

(a) Establishment; management under National Credit Union

Administration Board

There is established in the executive branch of the Government an

independent agency to be known as the National Credit Union

Administration. The Administration shall be under the management of

a National Credit Union Administration Board.

(b) Membership and appointment of Board

(1) In general

The Board shall consist of three members, who are broadly

representative of the public interest, appointed by the

President, by and with the advice and consent of the Senate. In

appointing the members of the Board, the President shall

designate the Chairman. Not more than two members of the Board

shall be members of the same political party.

(2) Appointment criteria

(A) Experience in financial services

In considering appointments to the Board under paragraph (1),

the President shall give consideration to individuals who, by

virtue of their education, training, or experience relating to

a broad range of financial services, financial services

regulation, or financial policy, are especially qualified to

serve on the Board.

(B) Limit on appointment of credit union officers

Not more than one member of the Board may be appointed to the

Board from among individuals who, at the time of the

appointment, are, or have recently been, involved with any

insured credit union as a committee member, director, officer,

employee, or other institution-affiliated party.

(c) Term of office

The term of office of each member of the Board shall be six

years, except that the terms of the two members, other than the

Chairman, initially appointed shall expire one upon the expiration

of two years after the date of appointment, and the other upon the

expiration of four years after the date of appointment. Board

members shall not be appointed to succeed themselves except the

initial members appointed for less than a six-year term may be

reappointed for a full six-year term and future members appointed

to fill unexpired terms may be reappointed for a full six-year

term. Any Board member may continue to serve as such after the

expiration of said member's term until a successor has qualified.

(d) Management of Administration vested in Board; adoption of

rules; quorum; report to President and Congress

The management of the Administration shall be vested in the

Board. The Board shall adopt such rules as it sees fit for the

transaction of its business and shall keep permanent and complete

records and minutes of its acts and proceedings. A majority of the

Board shall constitute a quorum. Not later than April 1 of each

calendar year, and at such other times as the Congress shall

determine, the Board shall make a report to the President and to

the Congress. Such a report shall summarize the operations of the

Administration and set forth such information as is necessary for

the Congress to review the financial program approved by the Board.

(e) Functions of Chairman

The Chairman of the Board shall be the spokesman for the Board

and shall represent the Board and the National Credit Union

Administration in its official relations with other branches of the

Government. The Chairman shall determine each Board member's area

of responsibility and shall review such assignments biennially. It

shall be the Chairman's responsibility to direct the implementation

of the adopted policies and regulations of the Board.

(f) Audit by General Accounting Office

The financial transactions of the Administration shall be subject

to audit by the General Accounting Office in accordance with the

principles and procedures applicable to commercial corporate

transactions and under such rules and regulations as may be

prescribed by the Comptroller General of the United States. The

audit shall be conducted at the place or places where the accounts

of the Administration are kept.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 102, formerly Sec. 3, as

added Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat. 628; amended

Pub. L. 91-206, Sec. 3, Mar. 10, 1970, 84 Stat. 49; renumbered

title I, Sec. 102, Pub. L. 91-468, Sec. 1(2), Oct. 19, 1970, 84

Stat. 994; amended Pub. L. 95-630, title V, Sec. 501, Nov. 10,

1978, 92 Stat. 3680; Pub. L. 97-320, title V, Sec. 502, Oct. 15,

1982, 96 Stat. 1528; Pub. L. 105-219, title II, Sec. 204, Aug. 7,

1998, 112 Stat. 922.)

-MISC1-

PRIOR PROVISIONS

Section 2 of act June 29, 1948, ch. 711, 62 Stat. 1091, which was

formerly classified to section 1751a of this title, provided for

the establishment in the Federal Security Agency of a Bureau of

Federal Credit Unions, which were under the supervision of a

Director appointed by the Federal Security Administrator. The

Bureau of Federal Credit Unions and the Director thereof were under

the general direction and supervision of the Federal Security

Administrator. The functions, powers, and duties of the Farm Credit

Administration under the Federal Credit Union Act, as amended (this

chapter), were exercised by the Bureau of Federal Credit Unions.

The functions, powers, and duties of the Governor of the Farm

Credit Administration under the Federal Credit Union Act, as

amended (this chapter), were exercised by the Director of the

Bureau of Federal Credit Unions.

Section 1 of act June 29, 1948 transferred to the Federal

Security Agency all functions, powers, and duties of the Farm

Credit Administration and of the Governor thereof under the Federal

Credit Union Act, as amended (this chapter), together with the

functions of the Secretary of Agriculture with respect thereto,

which were transferred to the Federal Deposit Insurance Corporation

by Reorganization Plan Numbered 1 of 1947, part IV, section 401

(set out in the Appendix to Title 5, Government Organization and

Employees).

Section 3 of act June 29, 1948 transferred to the Federal

Security Agency, to be used in the administration of the functions,

transferred, (a) all property, including office equipment,

transferred to the Federal Deposit Insurance Corporation pursuant

to Executive Order 9148 of April 27, 1942 (see note under section

1751 of this title), and in use on the effective date of this Act

(see section 5 of act June 29, 1948, set out as a note below); (b)

all property, including office equipment, purchased by the

Corporation for use exclusively in connection with the

administration of the Federal Credit Union Act, as amended (this

chapter), the cost of which had been charged to such functions and

which were in use on the effective date of this Act; (c) all

records and files pertaining exclusively to the supervision of

Federal Credit Unions; and (d) all personnel employed primarily in

the administration of the Federal Credit Union Act, as amended

(this chapter), on the effective date of this Act.

Section 4 of act June 29, 1948 transferred all funds allocated,

specifically or otherwise, in the budget of the Federal Deposit

Insurance Corporation for the administration of the Federal Credit

Union Act, as amended (this chapter), during the fiscal year ending

June 30, 1949, which were unexpended on the effective date of this

Act (see section 5 of act June 29, 1948, set out as a note below),

to the Federal Security Agency for use in the administration of the

Federal Credit Union Act, as amended (this chapter). The

Corporation was to be reimbursed for the funds so transferred and

for all other funds expended by it prior to the effective date of

this Act in the administration of the Federal Credit Union Act, as

amended (this chapter), in excess of fees from Federal Credit

unions received by the Corporation, by deducting such amounts from

the first moneys payable to the Secretary of the Treasury on

account of the retirement of the stock of the Federal Deposit

Insurance Corporation owned by the United States, and the

Corporation was to have a charge on such stock for such amounts.

Section 5 of act June 29, 1948 provided that the Act was to

become effective on the thirtieth day following the date of

enactment.

AMENDMENTS

1998 - Subsec. (b). Pub. L. 105-219 inserted heading, designated

existing provisions as par. (1), and added par. (2).

1982 - Subsec. (f). Pub. L. 97-320 struck out ''on a calendar

year basis'' after ''subject to audit''.

1978 - Pub. L. 95-630 generally revised section to eliminate the

position of Administrator and to vest the management of the

National Credit Union Administration in the National Credit Union

Administration Board.

1970 - Pub. L. 91-206 designated existing provisions as subsec.

(a), substituted provisions establishing an independent agency

known as the National Credit Union Administration and an

Administrator of such National Credit Union Administration for

provisions establishing a Bureau of Federal Credit Unions under the

supervision of a Director, which Director was appointed by, and,

under the general direction and supervision of, the Secretary of

Health, Education, and Welfare, and added subsecs. (b) to (f).

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-TRANS-

TRANSFER OF FUNCTIONS

Section 6 of Pub. L. 91-206 provided that:

''(a) All functions, property, records, and personnel of the

Bureau of Federal Credit Unions are transferred to the National

Credit Union Administration created by this Act (which generally

amended this chapter).

''(b) The Director of the Bureau of Federal Credit Unions in

office on the date of enactment of this Act (Mar. 10, 1970) shall

serve as acting Administrator of the National Credit Union

Administration pending the appointment of an Administrator in

accordance with section 3 of the Federal Credit Union Act as

amended by this Act (this section).''

-MISC5-

STUDY AND REPORT ON DIFFERING REGULATORY TREATMENT

Pub. L. 105-219, title IV, Sec. 401, Aug. 7, 1998, 112 Stat. 934,

provided that:

''(a) Study. - The Secretary (of the Treasury) shall conduct a

study of -

''(1) the differences between credit unions and other federally

insured financial institutions, including regulatory differences

with respect to regulations enforced by the Office of Thrift

Supervision, the Office of the Comptroller of the Currency, the

Federal Deposit Insurance Corporation, and the Administration;

and

''(2) the potential effects of the application of Federal laws,

including Federal tax laws, on credit unions in the same manner

as those laws are applied to other federally insured financial

institutions.

''(b) Report. - Not later than 1 year after the date of enactment

of this Act (Aug. 7, 1998), the Secretary shall submit a report to

the Congress on the results of the study required by subsection

(a).''

STUDY OF CORPORATE CREDIT UNIONS

Pub. L. 104-208, div. A, title II, Sec. 2606, Sept. 30, 1996,

110 Stat. 3009-473, provided that:

''(a) Definitions. - For purposes of this section, the following

definitions shall apply:

''(1) Administration. - The term 'Administration' means the

National Credit Union Administration.

''(2) Board. - The term 'Board' means the National Credit Union

Administration Board.

''(3) Corporate credit union. - The term 'corporate credit

union' has the meaning given such term by rule or regulation of

the Board.

''(4) Fund. - The term 'Fund' means the National Credit Union

Share Insurance Fund established under section 203 of the Federal

Credit Union Act (12 U.S.C. 1783).

''(5) Secretary. - The term 'Secretary' means the Secretary of

the Treasury.

''(b) Study. -

''(1) In general. - The Secretary, in consultation with the

Board, the Corporation, the Comptroller of the Currency, and the

Administration, shall conduct a study and evaluation of -

''(A) the oversight and supervisory practices of the

Administration concerning the Fund, including the treatment of

amounts deposited in the Fund pursuant to section 202(c) of the

Federal Credit Union Act (12 U.S.C. 1782(c)), including

analysis of -

''(i) whether those amounts should be -

''(I) refundable; or

''(II) treated as expenses; and

''(ii) the use of those amounts in determining equity

capital ratios;

''(B) the potential for, and potential effects of,

administration of the Fund by an entity other than the

Administration;

''(C) the 10 largest corporate credit unions in the United

States, conducted in cooperation with appropriate employees of

other Federal agencies with expertise in the examination of

federally insured financial institutions, including -

''(i) the investment practices of those credit unions; and

''(ii) the financial stability, financial operations, and

financial controls of those credit unions;

''(D) the regulations of the Administration; and

''(E) the supervision of corporate credit unions by the

Administration.

''(c) Report. - Not later than 12 months after the date of

enactment of this Act (Sept. 30, 1996), the Secretary shall submit

to the appropriate committees of the Congress, a report that

includes the results of the study and evaluation conducted under

subsection (b), together with any recommendations that the

Secretary considers to be appropriate.''

STUDY OF CREDIT UNION SYSTEM BY GENERAL ACCOUNTING OFFICE

Pub. L. 101-73, title XII, Sec. 1201, Aug. 9, 1989, 103 Stat.

519, directed Comptroller General of the United States to conduct a

comprehensive study of Nation's credit union system and before the

close of the 18-month period beginning on Aug. 9, 1989, to submit

to Committee on Banking, Finance and Urban Affairs of House of

Representatives and Committee on Banking, Housing, and Urban

Affairs of Senate a final report containing a detailed statement of

findings and conclusions, including recommendations for such

administrative and legislative action as Comptroller General deemed

advisable.

FEDERALLY CHARTERED CENTRAL CREDIT UNIONS; REPORT TO CONGRESS

Section 3 of Pub. L. 86-354 directed Director of Bureau of

Federal Credit Unions to make a study of desirability of providing

for federally chartered central credit unions and to submit to

Secretary of Health, Education, and Welfare, for transmission to

Congress on or before Apr. 15, 1960, a report of results thereof

and such recommendations for legislation thereon as Director deemed

appropriate.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1795i of this title.

-CITE-

12 USC Sec. 1753 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1753. Federal credit union organization

-STATUTE-

Any seven or more natural persons who desire to form a Federal

credit union shall each subscribe either individually or

collectively before some officer competent to administer oaths an

organization certificate in duplicate which shall specifically

state:

(1) the name of the association;

(2) the location of the proposed Federal credit union and the

territory in which it will operate;

(3) the names and addresses of the subscribers to the

certificate and the number of shares subscribed by each;

(4) the initial par value of the shares;

(5) the proposed field of membership, specified in detail;

(6) the term of the existence of the corporation, which may be

perpetual; and

(7) the fact that the certificate is made to enable such

persons to avail themselves of the advantages of this chapter.

Such organization certificate may also contain any provisions

approved by the Board for the management of the business of the

association and for the conduct of its affairs and relative to the

powers of its directors, officers, or stockholders.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 103, formerly Sec. 3, 48

Stat. 1217; 1947 Reorg. Plan No. 1, Sec. 401, eff. July 1, 1947,

12 F.R. 4534, 61 Stat. 952; June 29, 1948, ch. 711, Sec. 1, 2, 62

Stat. 1091; renumbered Sec. 4 and amended Pub. L. 86-354, Sec. 1,

Sept. 22, 1959, 73 Stat. 628; Pub. L. 91-206, Sec. 2(1), Mar. 10,

1970, 84 Stat. 49; renumbered title I, Sec. 103, Pub. L. 91-468,

Sec. 1(2), Oct. 19, 1970, 84 Stat. 994; amended Pub. L. 95-630,

title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681; Pub. L. 97-320,

title V, Sec. 503, 504, Oct. 15, 1982, 96 Stat. 1528.)

-MISC1-

AMENDMENTS

1982 - Pub. L. 97-320, Sec. 503, substituted ''each subscribe

either individually or collectively'' for ''subscribe''.

Par. (4). Pub. L. 97-320, Sec. 504, substituted ''the initial par

value of the shares'' for ''the par value of the shares, which

shall be $5 each''.

1978 - Pub. L. 95-630 substituted ''Board'' for

''Administrator''.

1970 - Pub. L. 91-206 substituted ''Administrator'' for

''Director''.

1959 - Pub. L. 86-354 changed ''The'' to ''the'' in subsecs. (1)

to (7) and the period to a semicolon in subsecs. (1) to (6) and

inserted ''and'' at end of subsec. (6).

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-TRANS-

TRANSFER OF FUNCTIONS

Transfer of functions of Farm Credit Administration and Governor

thereof, generally, see notes set out under section 1751 of this

title.

Functions of Governor of Farm Credit Administration under this

section transferred to Federal Deposit Insurance Corporation by

Reorg. Plan No. 1 of 1947.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1773 of this title.

-CITE-

12 USC Sec. 1754 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1754. Approval of organization certificate

-STATUTE-

The organization certificate shall be presented to the Board for

approval. Before any organization certificate is approved, an

appropriate investigation shall be made for the purpose of

determining (1) whether the organization certificate conforms to

the provisions of this chapter; (2) the general character and

fitness of the subscribers thereto; and (3) the economic

advisability of establishing the proposed Federal credit union.

Upon approval of such organization certificate by the Board it

shall be the charter of the corporation, and one of the originals

thereof shall be delivered to the corporation after the payment of

the fee required therefor. Upon such approval the Federal credit

union shall be a body corporate and as such, subject to the

limitations herein contained, shall be vested with all of the

powers and charged with all of the liabilities conferred and

imposed by this chapter upon corporations organized hereunder.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 104, formerly Sec. 4, 48

Stat. 1217; 1947 Reorg. Plan No. 1, Sec. 401, eff. July 1, 1947,

12 F.R. 4534, 61 Stat. 952; June 29, 1948, ch. 711, Sec. 1, 2, 62

Stat. 1091; renumbered Sec. 5 and amended Pub. L. 86-354, Sec. 1,

Sept. 22, 1959, 73 Stat. 629; Pub. L. 91-206, Sec. 2(1), Mar. 10,

1970, 84 Stat. 49; renumbered title I, Sec. 104, Pub. L. 91-468,

Sec. 1(2), Oct. 19, 1970, 84 Stat. 994; amended Pub. L. 95-630,

title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681.)

-MISC1-

AMENDMENTS

1978 - Pub. L. 95-630 substituted ''Board'' for ''Administrator''

in two places.

1970 - Pub. L. 91-206 substituted ''Administrator'' for

''Director'' in two places.

1959 - Pub. L. 86-354 substituted ''The'' for ''Any such'' in

first sentence and transferred second sentence to make it last

sentence.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-TRANS-

TRANSFER OF FUNCTIONS

Transfer of functions of Farm Credit Administration and Governor

thereof, generally, see notes set out under section 1751 of this

title.

Functions of Governor of Farm Credit Administration under this

section transferred to Federal Deposit Insurance Corporation by

Reorg. Plan No. 1 of 1947.

-CITE-

12 USC Sec. 1755 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1755. Fees

-STATUTE-

(a) Payment by Federal credit union to Administration

In accordance with rules prescribed by the Board, each Federal

credit union shall pay to the Administration an annual operating

fee which may be composed of one or more charges identified as to

the function or functions for which assessed.

(b) Determinations of amount, assessment periods, and payment dates

The fee assessed under this section shall be determined according

to a schedule, or schedules, or other method determined by the

Board to be appropriate, which gives due consideration to the

expenses of the Administration in carrying out its responsibilities

under this chapter and to the ability of Federal credit unions to

pay the fee. The Board shall, among other things, determine the

periods for which the fee shall be assessed and the date or dates

for the payment of the fee or increments thereof.

(c) Supervision charge exception; waiver of payment

If the annual operating fee is composed of separate charges, no

supervision charge shall be payable by a Federal credit union, and

the Board may waive payment of any or all other charges comprising

the fee, with respect to the year in which its charter is issued,

or in which final distribution is made in its liquidation or the

charter is canceled.

(d) Payment into Treasury of United States

All operating fees shall be deposited with the Treasurer of the

United States for the account of the Administration and may be

expended by the Board to defray the expenses incurred in carrying

out the provisions of this chapter including the examination and

supervision of Federal credit unions.

(e) Investment of annual operating fees not needed for current

operations

(1) Upon request of the Board, the Secretary of the Treasury

shall invest and reinvest such portions of the annual operating

fees deposited under subsection (d) of this section as the Board

determines are not needed for current operations.

(2) Such investments may be made only in interest bearing

securities of the United States with maturities requested by the

Board bearing interest at rates determined by the Secretary of the

Treasury, taking into consideration current market yields on

outstanding marketable obligations of the United States of

comparable maturities.

(3) All income derived from such investments and reinvestments

shall be deposited to the account of the Administration described

in subsection (d) of this section.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 105, formerly Sec. 5, 48

Stat. 1217; 1947 Reorg. Plan No. 1, Sec. 401, eff. July 1, 1947,

12 F.R. 4534, 61 Stat. 952; June 29, 1948, ch. 711, Sec. 1, 2, 62

Stat. 1091; Apr. 17, 1952, ch. 214, Sec. 1, 66 Stat. 63; renumbered

Sec. 6 and amended Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat.

629; Pub. L. 91-206, Sec. 2(1), (3), Mar. 10, 1970, 84 Stat. 49;

renumbered title I, Sec. 105, Pub. L. 91-468, Sec. 1(2), Oct. 19,

1970, 84 Stat. 994; amended Pub. L. 95-630, title V, Sec. 507, Nov.

10, 1978, 92 Stat. 3682; Pub. L. 97-320, title V, Sec. 505, Oct.

15, 1982, 96 Stat. 1528.)

-MISC1-

AMENDMENTS

1982 - Subsec. (e). Pub. L. 97-320 added subsec. (e).

1978 - Pub. L. 95-630 substituted provisions relating to the

payment of an operating fee by each Federal credit union to the

Board for provisions relating to the payment of costs incident to

the ascertainment of whether an organization certificate should be

approved and costs upon approval by the subscriber of such

certificate to the Administration and payment of a supervision fee

by each Federal credit union to the Administration.

1970 - Pub. L. 91-206 substituted ''Administrator'' for

''Director'' and ''Administration'' for ''Bureau'', wherever

appearing.

1959 - Pub. L. 86-354 incorporated in last sentence subject

matter formerly contained in a proviso clause following table and

authorized fees to be expended for supervisory expenses.

1952 - Act Apr. 17, 1952, amended section, substituting a

graduated scale of supervisory fees for the $10 a year supervisory

fee.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

EFFECTIVE DATE OF 1952 AMENDMENT

Section 2 of act Apr. 17, 1952, provided that: ''The amendment by

section 1 of this Act (amending this section) shall apply to

supervision fees payable with respect to the calendar year 1952 and

subsequent calendar years.''

-TRANS-

TRANSFER OF FUNCTIONS

Transfer of functions of Farm Credit Administration and Governor

thereof, generally, see notes set out under section 1751 of this

title.

Functions of Governor of Farm Credit Administration under this

section transferred to Federal Deposit Insurance Corporation by

Reorg. Plan No. 1 of 1947.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1766, 1772a of this

title.

-CITE-

12 USC Sec. 1756 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1756. Reports and examinations

-STATUTE-

Federal credit unions shall be under the supervision of the

Board, and shall make financial reports to it as and when it may

require, but at least annually. Each Federal credit union shall be

subject to examination by, and for this purpose shall make its

books and records accessible to, any person designated by the

Board.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 106, formerly Sec. 6, 48

Stat. 1218; Dec. 6, 1937, ch. 3, Sec. 1, 51 Stat. 4; 1947 Reorg.

Plan No. 1, Sec. 401, eff. July 1, 1947, 12 F.R. 4534, 61 Stat.

952; June 29, 1948, ch. 711, Sec. 1, 2, 62 Stat. 1091; renumbered

Sec. 7 and amended Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat.

629; Pub. L. 91-206, Sec. 2(1), Mar. 10, 1970, 84 Stat. 49;

renumbered title I, Sec. 106, Pub. L. 91-468, Sec. 1(2), Oct. 19,

1970, 84 Stat. 994; amended Pub. L. 95-630, title V, Sec. 508, Nov.

10, 1978, 92 Stat. 3683.)

-MISC1-

AMENDMENTS

1978 - Pub. L. 95-630 substituted ''Board'' for ''Administrator''

in two places and ''reports to it as and when it'' for ''reports to

him as and when he'' and struck out provisions relating to the

payment of an examination fee by Federal credit unions and the

deposit of such fee to the credit of the special fund created by

section 1755 of this title.

1970 - Pub. L. 91-206 substituted ''Administrator'' for

''Director'' in three places.

1959 - Pub. L. 86-354 provided for the making of reports to the

Director as and when he may require.

1937 - Act Dec. 6, 1937, inserted ''giving due consideration to

the time and expense incident to such examinations, and to the

ability of Federal credit unions to pay such fees'' and struck out

proviso relating to conditions relieving certain unions from

payment of examination fee.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-TRANS-

TRANSFER OF FUNCTIONS

Transfer of functions of Farm Credit Administration and Governor

thereof, generally, see notes set out under section 1751 of this

title.

Functions of Governor of Farm Credit Administration under this

section transferred to Federal Deposit Insurance Corporation by

Reorg. Plan No. 1 of 1947.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1766, 1772a, 1782 of this

title.

-CITE-

12 USC Sec. 1756a 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1756a. Omitted

-MISC1-

Section, act July 22, 1942, ch. 516, 56 Stat. 700, which

authorized reimbursement of Farm Credit Administration personnel

for use of private automobiles for examining, supervising, and

servicing Federal credit unions, was from the Department of

Agriculture Appropriation Act, 1943, and was not repeated in

subsequent appropriation acts. Similar provisions were contained

in act July 1, 1941, ch. 267, 55 Stat. 444, the Department of

Agriculture Appropriation Act, 1942.

-CITE-

12 USC Sec. 1757 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1757. Powers

-STATUTE-

A Federal credit union shall have succession in its corporate

name during its existence and shall have power -

(1) to make contracts;

(2) to sue and be sued;

(3) to adopt and use a common seal and alter the same at

pleasure;

(4) to purchase, hold, and dispose of property necessary or

incidental to its operations;

(5) to make loans, the maturities of which shall not exceed

twelve years except as otherwise provided herein, and extend

lines of credit to its members, to other credit unions, and to

credit union organizations and to participate with other credit

unions, credit union organizations, or financial organizations in

making loans to credit union members in accordance with the

following:

(A) Loans to members shall be made in conformity with

criteria established by the board of directors: Provided, That

-

(i) a residential real estate loan on a one-to-four-family

dwelling, including an individual cooperative unit, that is

or will be the principal residence of a credit union member,

and which is secured by a first lien upon such dwelling, may

have a maturity not exceeding thirty years or such other

limits as shall be set by the National Credit Union

Administration Board (except that a loan on an individual

cooperative unit shall be adequately secured as defined by

the Board), subject to the rules and regulations of the

Board;

(ii) a loan to finance the purchase of a mobile home, which

shall be secured by a first lien on such mobile home, to be

used by the credit union member as his residence, a loan for

the repair, alteration, or improvement of a residential

dwelling which is the residence of a credit union member, or

a second mortgage loan secured by a residential dwelling

which is the residence of a credit union member, shall have a

maturity not to exceed 15 years or any longer term which the

Board may allow;

(iii) a loan secured by the insurance or guarantee of, or

with advance commitment to purchase the loan by, the Federal

Government, a State government, or any agency of either may

be made for the maturity and under the terms and conditions

specified in the law under which such insurance, guarantee,

or commitment is provided;

(iv) a loan or aggregate of loans to a director or member

of the supervisory or credit committee of the credit union

making the loan which exceeds $20,000 plus pledged shares, be

approved by the board of directors;

(v) loans to other members for which directors or members

of the supervisory or credit committee act as guarantor or

endorser be approved by the board of directors when such

loans standing alone or when added to any outstanding loan or

loans of the guarantor or endorser exceeds $20,000;

(vi) the rate of interest may not exceed 15 per centum per

annum on the unpaid balance inclusive of all finance charges,

except that the Board may establish -

(I) after consultation with the appropriate committees of

the Congress, the Department of Treasury, and the Federal

financial institution regulatory agencies, an interest rate

ceiling exceeding such 15 per centum per annum rate, for

periods not to exceed 18 months, if it determines that

money market interest rates have risen over the preceding

six-month period and that prevailing interest rate levels

threaten the safety and soundness of individual credit

unions as evidenced by adverse trends in liquidity,

capital, earnings, and growth; and

(II) a higher interest rate ceiling for Agent members for

the Central Liquidity Facility in carrying out the

provisions of subchapter III of this chapter for such

periods as the Board may authorize;

(vii) the taking, receiving, reserving, or charging of a

rate of interest greater than is allowed by this paragraph,

when knowingly done, shall be deemed a forfeiture of the

entire interest which the note, bill, or other evidence of

debt carries with it, or which has been agreed to be paid

thereon. If such greater rate of interest has been paid, the

person by whom it has been paid, or his legal

representatives, may recover back from the credit union

taking or receiving the same, in an action in the nature of

an action of debt, the entire amount of interest paid; but

such action must be commenced within two years from the time

the usurious collection was made;

(viii) a borrower may repay his loan, prior to maturity in

whole or in part on any business day without penalty, except

that on a first or second mortgage loan a Federal credit

union may require that any partial prepayments (I) be made on

the date monthly installments are due, and (II) be in the

amount of that part of one or more monthly installments which

would be applicable to principal;

(ix) loans shall be paid or amortized in accordance with

rules and regulations prescribed by the Board after taking

into account the needs or conditions of the borrowers, the

amounts and duration of the loans, the interests of the

members and the credit unions, and such other factors as the

Board deems relevant;

(x) loans must be approved by the credit committee or a

loan officer, but no loan may be made to any member if, upon

the making of that loan, the member would be indebted to the

Federal credit union upon loans made to him in an aggregate

amount which would exceed 10 per centum of the credit union's

unimpaired capital and surplus.

(B) A self-replenishing line of credit to a borrower may be

established to a stated maximum amount on certain terms and

conditions which may be different from the terms and conditions

established for another borrower.

(C) Loans to other credit unions shall be approved by the

board of directors.

(D) Loans to credit union organizations shall be approved by

the board of directors and shall not exceed 1 per centum of the

paid-in and unimpaired capital and surplus of the credit

union. A credit union organization means any organization as

determined by the Board, which is established primarily to

serve the needs of its member credit unions, and whose business

relates to the daily operations of the credit unions they

serve.

(E) Participation loans with other credit unions, credit

union organizations, or financial organizations shall be in

accordance with written policies of the board of directors:

Provided, That a credit union which originates a loan for which

participation arrangements are made in accordance with this

subsection shall retain an interest of at least 10 per centum

of the face amount of the loan.

(6) to receive from its members, from other credit unions, from

an officer, employee, or agent of those nonmember units of

Federal, Indian tribal, State, or local governments and political

subdivisions thereof enumerated in section 1787 of this title and

in the manner so prescribed, from the Central Liquidity Facility,

and from nonmembers in the case of credit unions serving

predominately low-income members (as defined by the Board)

payments, representing equity, on -

(A) shares which may be issued at varying dividend rates;

(B) share certificates which may be issued at varying

dividend rates and maturities; and

(C) share draft accounts authorized under section 1785(f) of

this title;

subject to such terms, rates, and conditions as may be

established by the board of directors, within limitations

prescribed by the Board.

(7) to invest its funds (A) in loans exclusively to members;

(B) in obligations of the United States of America, or securities

fully guaranteed as to principal and interest thereby; (C) in

accordance with rules and regulations prescribed by the Board, in

loans to other credit unions in the total amount not exceeding 25

per centum of its paid-in and unimpaired capital and surplus; (D)

in shares or accounts of savings and loan associations or mutual

savings banks, the accounts of which are insured by the Federal

Savings and Loan Insurance Corporation or the Federal Deposit

Insurance Corporation; (E) in obligations issued by banks for

cooperatives, Federal land banks, Federal intermediate credit

banks, Federal home loan banks, the Federal Home Loan Bank Board,

or any corporation designated in section 9101(3) of title 31 as a

wholly owned Government corporation; or in obligations,

participations, or other instruments of or issued by, or fully

guaranteed as to principal and interest by, the Federal National

Mortgage Association or the Government National Mortgage

Association, or in mortgages, obligations, or other securities

which are or ever have been sold by the Federal Home Loan

Mortgage Corporation pursuant to section 1454 or 1455 of this

title; or in obligations or other instruments or securities of

the Student Loan Marketing Association; or in obligations,

participations, securities, or other instruments of, or issued

by, or fully guaranteed as to principal and interest by any other

agency of the United States and a Federal credit union may issue

and sell securities which are guaranteed pursuant to section

1721(g) of this title; (F) in participation certificates

evidencing beneficial interests in obligations, or in the right

to receive interest and principal collections therefrom, which

obligations have been subjected by one or more Government

agencies to a trust or trusts for which any executive department,

agency, or instrumentality of the United States (or the head

thereof) has been named to act as trustee; (G) in shares or

deposits of any central credit union in which such investments

are specifically authorized by the board of directors of the

Federal credit union making the investment; (H) in shares, share

certificates, or share deposits of federally insured credit

unions; (I) in the shares, stocks, or obligations of any other

organization, providing services which are associated with the

routine operations of credit unions, up to 1 per centum of the

total paid in and unimpaired capital and surplus of the credit

union with the approval of the Board: Provided, however, That

such authority does not include the power to acquire control

directly or indirectly, of another financial institution, nor

invest in shares, stocks or obligations of an insurance company,

trade association, liquidity facility or any other similar

organization, corporation, or association, except as otherwise

expressly provided by this chapter; (J) in the capital stock of

the National Credit Union Central Liquidity Facility; (K)

investments in obligations of, or issued by, any State or

political subdivision thereof (including any agency, corporation,

or instrumentality of a State or political subdivision), except

that no credit union may invest more than 10 per centum of its

unimpaired capital and surplus in the obligations of any one

issuer (exclusive of general obligations of the issuer).

(FOOTNOTE 1)

(FOOTNOTE 1) So in original. The period probably should be a

semicolon.

(8) to make deposits in national banks and in State banks,

trust companies, and mutual savings banks operating in accordance

with the laws of the State in which the Federal credit union does

business, or in banks or institutions the accounts of which are

insured by the Federal Deposit Insurance Corporation or the

Federal Savings and Loan Insurance Corporation, and for Federal

credit unions or credit unions authorized by the Department of

Defense operating suboffices on American military installations

in foreign countries or trust territories of the United States to

maintain demand deposit accounts in banks located in those

countries or trust territories, subject to such regulations as

may be issued by the Board and provided such banks are

correspondents of banks described in this paragraph;

(9) to borrow, in accordance with such rules and regulations as

may be prescribed by the Board, from any source, in an aggregate

amount not exceeding, except as authorized by the Board in

carrying out the provisions of subchapter III of this chapter, 50

per centum of its paid-in and unimpaired capital and surplus:

Provided, That any Federal credit union may discount with or sell

to any Federal intermediate credit bank any eligible obligations

up to the amount of its paid-in and unimpaired capital;

(10) to levy late charges, in accordance with the bylaws, for

failure of members to meet promptly their obligations to the

Federal credit union;

(11) to impress and enforce a lien upon the shares and

dividends of any member, to the extent of any loan made to him

and any dues or charges payable by him;

(12) in accordance with rules and regulations prescribed by the

Board, to sell to members negotiable checks (including travelers

checks), money orders, and other similar money transfer

instruments, and to cash checks and money orders for members, for

a fee;

(13) in accordance with rules and regulations prescribed by the

Board, to purchase, sell, pledge, or discount or otherwise

receive or dispose of, in whole or in part, any eligible

obligations (as defined by the Board) of its members and to

purchase from any liquidating credit union notes made by

individual members of the liquidating credit union at such prices

as may be agreed upon by the board of directors of the

liquidating credit union and the board of directors of the

purchasing credit union, but no purchase may be made under

authority of this paragraph if, upon the making of that purchase,

the aggregate of the unpaid balances of notes purchased under

authority of this paragraph would exceed 5 per centum of the

unimpaired capital and surplus of the credit union;

(14) to sell all or a part of its assets to another credit

union, to purchase all or part of the assets of another credit

union and to assume the liabilities of the selling credit union

and those of its members subject to regulations of the Board;

(15) to invest in securities that -

(A) are offered and sold pursuant to section 77d(5) of title

15;

(B) are mortgage related securities (as that term is defined

in section 78c(a)(41) of title 15), subject to such regulations

as the Board may prescribe, including regulations prescribing

minimum size of the issue (at the time of initial distribution)

or minimum aggregate sales prices, or both; or

(C) are small business related securities (as defined in

section 78c(a)(53) of title 15), subject to such regulations as

the Board may prescribe, including regulations prescribing the

minimum size of the issue (at the time of the initial

distribution), the minimum aggregate sales price, or both;

(16) subject to such regulations as the Board may prescribe, to

provide technical assistance to credit unions in Poland and

Hungary; and

(17) to exercise such incidental powers as shall be necessary

or requisite to enable it to carry on effectively the business

for which it is incorporated.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 107, formerly Sec. 7, 48

Stat. 1218; Dec. 6, 1937, ch. 3, Sec. 2, 51 Stat. 4; July 31, 1946,

ch. 711, Sec. 1, 60 Stat. 744; 1947 Reorg. Plan No. 1, Sec. 401,

eff. July 1, 1947, 12 F.R. 4534, 61 Stat. 952; June 29, 1948, ch.

711, Sec. 1, 2, 62 Stat. 1091; Oct. 25, 1949, ch. 713, Sec. 1, 63

Stat. 890; May 13, 1952, ch. 264, 66 Stat. 70; renumbered Sec. 8

and amended Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat. 630;

Pub. L. 88-353, Sec. 1, July 2, 1964, 78 Stat. 269; Pub. L. 89-429,

Sec. 7, May 24, 1966, 80 Stat. 167; Pub. L. 90-44, Sec. 2, 3, July

3, 1967, 81 Stat. 110, 111; Pub. L. 90-375, Sec. 1(1)-(3), July 5,

1968, 82 Stat. 284; Pub. L. 90-448, title VIII, Sec. 807(n), Aug.

1, 1968, 82 Stat. 545; Pub. L. 91-206, Sec. 2(1), Mar. 10, 1970, 84

Stat. 49; renumbered title I, Sec. 107, and amended Pub. L. 91-468,

Sec. 1(2), 10, Oct. 19, 1970, 84 Stat. 994, 1017; Pub. L. 92-318,

title I, Sec. 133(c)(4), June 23, 1972, 86 Stat. 270; Pub. L.

93-383, title VII, Sec. 721, title VIII, Sec. 805(c)(5), Aug. 22,

1974, 88 Stat. 719, 727; Pub. L. 93-495, title I, Sec. 101(d), Oct.

28, 1974, 88 Stat. 1502; Pub. L. 93-569, Sec. 6, Dec. 31, 1974, 88

Stat. 1866; Pub. L. 95-22, title III, Sec. 302, 303, Apr. 19, 1977,

91 Stat. 49, 51; Pub. L. 95-630, title V, Sec. 502(b), title XVIII,

Sec. 1803, Nov. 10, 1978, 92 Stat. 3681, 3723; Pub. L. 96-153,

title III, Sec. 323(d), Dec. 21, 1979, 93 Stat. 1120; Pub. L.

96-161, title I, Sec. 103(b), Dec. 28, 1979, 93 Stat. 1234; Pub. L.

96-221, title III, Sec. 305(b), 307, 309(a)(1), 310, Mar. 31, 1980,

94 Stat. 146-149; Pub. L. 97-320, title V, Sec. 506-514, 516-518,

Oct. 15, 1982, 96 Stat. 1528-1530; Pub. L. 97-457, Sec. 25, 26,

Jan. 12, 1983, 96 Stat. 2510; Pub. L. 98-440, title I, Sec. 105(b),

Oct. 3, 1984, 98 Stat. 1691; Pub. L. 98-479, title II, Sec. 206,

Oct. 17, 1984, 98 Stat. 2234; Pub. L. 100-86, title VII, Sec. 702,

703, Aug. 10, 1987, 101 Stat. 652; Pub. L. 101-179, title II, Sec.

206(b), Nov. 28, 1989, 103 Stat. 1311; Pub. L. 103-325, title II,

Sec. 206(b), Sept. 23, 1994, 108 Stat. 2199; Pub. L. 104-208, div.

A, title II, Sec. 2306, Sept. 30, 1996, 110 Stat. 3009-426.)

-COD-

CODIFICATION

In par. (7), ''section 9101(3) of title 31'' substituted for

''section 101 of the Government Corporation Control Act (31 U.S.C.

846)'' on authority of Pub. L. 97-258, Sec. 4(b), Sept. 13, 1982,

96 Stat. 1067, the first section of which enacted Title 31, Money

and Finance.

-MISC3-

AMENDMENTS

1996 - Par. (5)(A)(iv), (v). Pub. L. 104-208 substituted

''$20,000'' for ''$10,000''.

1994 - Par. (15)(C). Pub. L. 103-325 added subpar. (C).

1989 - Pars. (16), (17). Pub. L. 101-179 added par. (16) and

redesignated former par. (16) as (17).

1987 - Par. (5)(A)(ii). Pub. L. 100-86, Sec. 702, substituted

''15 years or any longer term which the Board may allow'' for

''fifteen years unless such loan is insured or guaranteed as

provided in subparagraph (iii)''.

Par. (6). Pub. L. 100-86, Sec. 703, inserted '', representing

equity,'' after ''payments''.

1984 - Par. (5)(A)(ii). Pub. L. 98-479 inserted ''a loan for the

repair, alteration, or improvement of a residential dwelling which

is the residence of a credit union member,''.

Pars. (15), (16). Pub. L. 98-440, Sec. 105(b), added par. (15)

and redesignated former par. (15) as (16).

1983 - Par. (5)(A)(i). Pub. L. 97-457, Sec. 25, substituted

''Administration'' for ''Association'' after ''National Credit

Union''.

Par. (7)(K). Pub. L. 97-457, Sec. 26, redesignated cl. (L) as (K)

and substituted a period for ''; and'' at end.

1982 - Par. (5)(A)(i). Pub. L. 97-320, Sec. 507-509, substituted

''on'' for ''which is made to finance the acquisition of'' after

''real estate loan'' and ''that is or will be'' for ''for'' after

''cooperative unit,'', struck out ''the sales price of which is not

more than 150 per centum of the median sales price of residential

real property situated in the geographical area (as determined by

the board of directors) in which the property is located,'' after

''credit union member'', and inserted ''or such other limits as

shall be set by the National Credit Union Association Board'' after

''not exceeding thirty years''.

Par. (5)(A)(ii). Pub. L. 97-320, Sec. 510, substituted ''or a

second mortgage loan secured by a residential dwelling'' for ''or

for the repair, alteration, or improvement of a residential

dwelling''.

Par. (5)(A)(iii). Pub. L. 97-320, Sec. 511, inserted '', or with

advance commitment to purchase the loan by,'' and substituted

''insurance, guarantee, or commitment'' for ''insurance or

guarantee''.

Par. (5)(A)(iv), (v). Pub. L. 97-320, Sec. 512, substituted

''$10,000'' for ''$5,000''.

Par. (5)(A)(viii). Pub. L. 97-320, Sec. 513, inserted condition

relating to partial prepayments of first or second mortgage loans.

Par. (5)(A)(x). Pub. L. 97-320, Sec. 506, added cl. (x).

Par. (7)(E). Pub. L. 97-320, Sec. 516, inserted provisions

relating to instruments issued or guaranteed by any other agency of

the United States, and that a Federal Credit Union may issue and

sell securities which are guaranteed pursuant to section 1721(g) of

this title.

Par. (7)(L). Pub. L. 97-320, Sec. 514, added cl. (L).

Par. (8). Pub. L. 97-320, Sec. 517, inserted ''or in banks or

institutions the accounts of which are insured by the Federal

Deposit Insurance Corporation or the Federal Savings and Loan

Insurance Corporation,'' after ''in which the Federal Credit Union

does business,''.

Par. (12). Pub. L. 97-320, Sec. 518, substituted '', money

orders, and other similar money transfer instruments'' for ''and

money orders'', and struck out ''which does not exceed the direct

and indirect costs incident to providing such service'' after ''for

a fee''.

1980 - Par. (5)(A)(i). Pub. L. 96-221, Sec. 309(a)(1), inserted

provisions relating to an individual cooperative unit.

Par. (5)(A)(vi). Pub. L. 96-221, Sec. 310, substituted provisions

setting forth maximum interest rate of 15 per centum per annum,

subject to specified exceptions, for provisions setting forth a

maximum interest rate of 1 per centum per month.

Par. (6). Pub. L. 96-221, Sec. 305(b), 307, revised existing

provisions respecting credit unions serving predominately

low-income members including provisions added by Pub. L. 96-161,

and repealed the amendment made by Pub. L. 96-161. See Repeals and

Effective Date of 1980 Amendment notes below.

1979 - Par. (6). Pub. L. 96-161 inserted '', and to issue, deal

in, and accept share drafts as orders of withdrawal against shares,

subject to such terms, rates, and conditions as may be prescribed

by the Board'' after ''within limitations prescribed by the

Board''.

Pub. L. 96-153 substituted ''Federal, Indian tribal, State'' for

''Federal, State''.

1978 - Par. (5). Pub. L. 95-630, Sec. 502(b), substituted

''Board'' for ''Administrator'' wherever appearing.

Par. (6). Pub. L. 95-630, Sec. 502(b), 1803(a), inserted ''from

the Central Liquidity Facility,'' after ''in the manner so

prescribed,'' and substituted ''Board'' for ''Administrator'' in

two places.

Par. (7). Pub. L. 95-630, Sec. 502(b), 1803(b), substituted

''Board'' for ''Administrator'' wherever appearing and added cl.

(J).

Par. (8). Pub. L. 95-630, Sec. 502(b), substituted ''Board'' for

''Administrator''.

Par. (9). Pub. L. 95-630, Sec. 502(b), 1803(c), substituted

''Board'' for ''Administrator'' and inserted '', except as

authorized by the Board in carrying out the provisions of

subchapter III of this chapter,'' after ''amount not exceeding''.

Pars. (12) to (14). Pub. L. 95-630, Sec. 502(b), substituted

''Board'' for ''Administrator'' wherever appearing.

1977 - Par. (5). Pub. L. 95-22, Sec. 302(a), among other changes,

inserted provisions permitting Federal credit unions to establish

lines of credit for their members, to raise the maximum loan

maturity for most loans to twelve years, and to make loans secured

by a first lien and made for the purchase of a one-to-four-family

dwelling for the principal residence of a credit union member.

Par. (6). Pub. L. 95-22, Sec. 302(b), 303(a), redesignated par.

(7) as (6) and substituted reference to payments on shares which

may be issued at varying dividend rates and payments on share

certificates which may be issued at varying dividend rates and

maturities, subject to such terms, rates, and conditions as may be

established by the board of directors, within limitations

prescribed by the Administrator for reference to payments on

shares, share certificates, or share deposits. Former par. (6),

relating to the power of Federal credit unions to make loans to its

own directors and to its own supervisory credit committee, was

struck out.

Par. (7). Pub. L. 95-22, Sec. 303(b), redesignated par. (8) as

(7) and added subpar. (I). Former par. (7) redesignated (6).

Pars. (8) to (12). Pub. L. 95-22, Sec. 303(c), redesignated pars.

(9) to (13) as (8) to (12), respectively. Former par. (8)

redesignated (7).

Par. (13). Pub. L. 95-22, Sec. 303(c), (d), redesignated par.

(14) as (13) and inserted reference to purchase, sell, pledge, or

discount or otherwise receive or dispose of, in whole or in part,

any eligible obligations (as defined by the Administrator) of its

members. Former par. (13) redesignated (12).

Par. (14). Pub. L. 95-22, Sec. 303(e), added par. (14).

1974 - Par. (5). Pub. L. 93-569 inserted ''except that loans made

in accordance with section 1703(b) of this title and section 1819

of title 38, may be for the maturities specified therein,'' after

''ten years''.

Par. (6). Pub. L. 93-383, Sec. 721(a), substituted provisions

relating to approval of loans by the board of directors for

provisions requiring annual reports to the Administrator with

respect to loans and setting forth conditions for the making of

loans.

Par. (7). Pub. L. 93-495 inserted provisions relating to receipt

of payments of shares, etc., from officers, employees, or agents of

nonmember units of Federal, State, or local governments and

political subdivisions enumerated in section 1787 of this title.

Par. (8)(E). Pub. L. 93-383, Sec. 805(c)(5), inserted reference

to mortgages, obligations, or other securities sold by the Federal

Home Loan Mortgage Corporation pursuant to section 1454 or 1455 of

this title.

Par. (9). Pub. L. 93-383, Sec. 721(b), inserted provisions

relating to Federal credit unions or credit unions authorized by

the Department of Defense.

1972 - Par. (8)(E). Pub. L. 92-318 authorized investments in

obligations or other instruments or securities of the Student Loan

Marketing Association.

1970 - Pars. (5), (6), (8), (10), (13), (14), Pub. L. 91-206

substituted ''Administrator'' for ''Director'' wherever appearing.

Par. (7). Pub. L. 91-468, Sec. 10(1), permitted a Federal credit

union to not only receive from members but also from other

federally insured credit unions, payments on shares as well as

share certificates or share deposits and, in the case of credit

unions serving predominantly low-income members, to receive

payments on shares, share certificates or share deposits from

nonmembers.

Par. (8). Pub. L. 91-468, Sec. 10(2), authorized a Federal credit

union to invest in shares, share certificates or share deposits of

federally insured credit unions.

1968 - Par. (5). Pub. L. 90-375, Sec. 1(1), substituted

provisions authorizing Federal credit unions to make unsecured

loans with maturities not exceeding five years, and secured loans

with maturities not exceeding ten years for provisions authorizing

federal credit unions to make loans with maturities not exceeding

five years.

Par. (8). Pub. L. 90-448 authorized investments in obligations,

participations, or other instruments of or issued by, or guaranteed

as to principal and interest by, the Government National Mortgage

Association.

Pub. L. 90-375, Sec. 1(2), added cl. (G).

Pars. (14), (15). Pub. L. 90-375, Sec. 1(3), added par. (14) and

redesignated former par. (14) as (15).

1967 - Par. (5). Pub. L. 90-44, Sec. 2(1), substituted ''may be

made except as authorized under paragraph (6) of this section'' for

''shall exceed the amount of his holdings in the Federal Credit

Union as represented by shares thereof plus the total unencumbered

and unpledged shareholdings in the Federal Credit Union of any

member pledged as security for the obligation of such director or

committee member''.

Pars. (6), (7). Pub. L. 90-44, Sec. 2(3), added par. (6) and

redesignated former pars. (6) and (7) as (7) and (8), respectively.

Pars. (8) to (14). Pub. L. 90-44, Sec. 2(2), (3), redesignated

former par. (7) as (8), authorized in cl. (D) investment of funds

in shares or accounts of mutual savings banks, the accounts of

which are insured by the Federal Deposit Insurance Corporation, and

redesignated former pars. (8) to (13) as (9) to (14), respectively.

1966 - Par. (7). Pub. L. 89-429 expanded list of possible areas

of investment of funds by Federal credit unions to include

obligations, participations, or other instruments of or issued by,

or fully guaranteed as to principal and interest by, the Federal

National Mortgage Association and participation certificates

evidencing beneficial interests in obligations, or in the right to

receive interest and principal collections therefrom, which

obligations have been subjected by one or more Government agencies

to a trust or trusts for which any executive department, agency, or

instrumentality of the United States (or the head thereof) has been

named to act as trustee.

1964 - Par. (7)(E). Pub. L. 88-353 added cl. (E).

1959 - Pub. L. 86-354 made numerous capitalization, punctuation

and phraseological changes throughout text; increased maturities

limits for loans from three to five years, authorized approval of

loans by a loan officer and authorized loans in an amount which

shall include total unencumbered and unpledged shareholdings in the

Federal credit union of any member pledged as security for the

obligation of the director or committee member, provided for

payment and amortization of loans, redesignated provisions (a) to

(d) as (A) to (D) in par. (7), substituted ''levy late charges''

for ''fine members'' and inserted ''of members'' in par. (10),

substituted ''charges'' for ''fines'' in par. (11), added par.

(12); and redesignated former par. (12) as par. (13).

1952 - Par. (7)(d). Act May 13, 1952, authorized investment of

funds in shares or accounts of any other institutions whose

accounts are insured by the Federal Savings and Loan Insurance

Corporation.

1949 - Par. (5). Act Oct. 25, 1949, increased from 2 years to 3

years the limit for maturity of loans.

1946 - Par. (5). Act July 31, 1946, inserted last two sentences

to provide for the forfeiture of the entire amount of interest

reserved and for the recovery of the entire amount of interest paid

for the violation of the interest limitation.

1937 - Par. (7)(c), (d). Act Dec. 6, 1937, added cls. (c) and

(d).

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by section 305(b) of Pub. L. 96-221 effective at close

of Mar. 31, 1980, see section 306 of Pub. L. 96-221, set out as a

note under section 371a of this title.

EFFECTIVE AND TERMINATION DATES OF 1979 AMENDMENTS

Amendment by Pub. L. 96-161 effective Dec. 31, 1979, with that

amendment to remain in effect until the close of Mar. 31, 1980, see

section 104 of Pub. L. 96-161, set out as a note under section 371a

of this title.

Section 323(e) of Pub. L. 96-153 provided that: ''The amendments

made by subsections (a) through (d) (amending this section and

sections 1728, 1787, and 1821 of this title) are not applicable to

any claim arising out of the closing of a bank, savings and loan

association, or credit union prior to the date of enactment of this

Act (Dec. 21, 1979), but shall be applicable to any such claim

arising on or after such date.''

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by section 502(b) of Pub. L. 95-630 effective on

expiration of 120 days after Nov. 10, 1978, and transitional

provisions, see section 509 of Pub. L. 95-630, set out as a note

under section 1752 of this title.

Amendment by section 1803 of Pub. L. 95-630 effective Oct. 1,

1979, see section 1806 of Pub. L. 95-630, set out as an Effective

Date note under section 1795 of this title.

EFFECTIVE DATE OF 1974 AMENDMENTS

Amendment by Pub. L. 93-569 effective Dec. 31, 1974, see section

10 of Pub. L. 93-569, set out as a note under section 3702 of Title

38, Veterans' Benefits.

Amendment by Pub. L. 93-495 effective on 30th day beginning after

Oct. 28, 1974, see section 101(g) of Pub. L. 93-495, set out as a

note under section 1813 of this title.

EFFECTIVE DATE OF 1968 AMENDMENT

For effective date of amendment by title VIII of Pub. L. 90-448,

see section 808 of Pub. L. 90-448, set out as a note under section

1716b of this title.

REPEALS

Amendment by section 103 of Pub. L. 96-161, cited as a credit to

this section, was repealed at the close of Mar. 31, 1980, by

section 307 of Pub. L. 96-221, and substantially identical

provisions were enacted by section 305 of Pub. L. 96-221, such

amendments to take effect at the close of Mar. 31, 1980.

-TRANS-

TRANSFER OF FUNCTIONS

Federal Home Loan Bank Board and Federal Savings and Loan

Insurance Corporation abolished and functions transferred, see

sections 401 to 406 of Pub. L. 101-73, set out as a note under

section 1437 of this title.

Transfer of functions of Farm Credit Administration and Governor

thereof, generally, see notes set out under section 1751 of this

title.

Functions of Governor of Farm Credit Administration under this

section transferred to Federal Deposit Insurance Corporation by

Reorg. Plan No. 1 of 1947.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1752, 1761c of this

title.

-CITE-

12 USC Sec. 1757a 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1757a. Limitation on member business loans

-STATUTE-

(a) In general

On and after August 7, 1998, no insured credit union may make any

member business loan that would result in a total amount of such

loans outstanding at that credit union at any one time equal to

more than the lesser of -

(1) 1.75 times the actual net worth of the credit union; or

(2) 1.75 times the minimum net worth required under section

1790d(c)(1)(A) of this title for a credit union to be well

capitalized.

(b) Exceptions

Subsection (a) of this section does not apply in the case of -

(1) an insured credit union chartered for the purpose of

making, or that has a history of primarily making, member

business loans to its members, as determined by the Board; or

(2) an insured credit union that -

(A) serves predominantly low-income members, as defined by

the Board; or

(B) is a community development financial institution, as

defined in section 4702 of this title.

(c) Definitions

As used in this section -

(1) the term ''member business loan'' -

(A) means any loan, line of credit, or letter of credit, the

proceeds of which will be used for a commercial, corporate or

other business investment property or venture, or agricultural

purpose; and

(B) does not include an extension of credit -

(i) that is fully secured by a lien on a 1- to 4-family

dwelling that is the primary residence of a member;

(ii) that is fully secured by shares in the credit union

making the extension of credit or deposits in other financial

institutions;

(iii) that is described in subparagraph (A), if it was made

to a borrower or an associated member that has a total of all

such extensions of credit in an amount equal to less than

$50,000;

(iv) the repayment of which is fully insured or fully

guaranteed by, or where there is an advance commitment to

purchase in full by, any agency of the Federal Government or

of a State, or any political subdivision thereof; or

(v) that is granted by a corporate credit union (as that

term is defined by the Board) to another credit union.

(2) the term ''net worth'' -

(A) with respect to any insured credit union, means the

credit union's retained earnings balance, as determined under

generally accepted accounting principles; and

(B) with respect to a credit union that serves predominantly

low-income members, as defined by the Board, includes secondary

capital accounts that are -

(i) uninsured; and

(ii) subordinate to all other claims against the credit

union, including the claims of creditors, shareholders, and

the Fund; and

(3) the term ''associated member'' means any member having a

shared ownership, investment, or other pecuniary interest in a

business or commercial endeavor with the borrower.

(d) Effect on existing loans

An insured credit union that has, on August 7, 1998, a total

amount of outstanding member business loans that exceeds the amount

permitted under subsection (a) of this section shall, not later

than 3 years after August 7, 1998, reduce the total amount of

outstanding member business loans to an amount that is not greater

than the amount permitted under subsection (a) of this section.

(e) Consultation and cooperation with State credit union

supervisors

In implementing this section, the Board shall consult and seek to

work cooperatively with State officials having jurisdiction over

State-chartered insured credit unions.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 107A, as added Pub. L.

105-219, title II, Sec. 203(a), Aug. 7, 1998, 112 Stat. 920.)

-MISC1-

STUDY AND REPORT

Pub. L. 105-219, title II, Sec. 203(b), Aug. 7, 1998, 112 Stat.

922, provided that:

''(1) Study. - The Secretary (of the Treasury) shall conduct a

study of member business lending by insured credit unions,

including -

''(A) an examination of member business lending over $500,000

and under $50,000, and a breakdown of the types and sizes of

businesses that receive member business loans;

''(B) a review of the effectiveness and enforcement of

regulations applicable to insured credit union member business

lending;

''(C) whether member business lending by insured credit unions

could affect the safety and soundness of insured credit unions or

the National Credit Union Share Insurance Fund;

''(D) the extent to which member business lending by insured

credit unions helps to meet financial services needs of low- and

moderate-income individuals within the field of membership of

insured credit unions;

''(E) whether insured credit unions that engage in member

business lending have a competitive advantage over other insured

depository institutions, and if any such advantage could affect

the viability and profitability of such other insured depository

institutions; and

''(F) the effect of enactment of this Act (see Short Title of

1998 Amendment note set out under section 1751 of this title) on

the number of insured credit unions involved in member business

lending and the overall amount of commercial lending.

''(2) NCUA cooperation. - The National Credit Union

Administration shall, upon request, provide such information as the

Secretary may require to conduct the study required under paragraph

(1).

''(3) Report. - Not later than 12 months after the date of

enactment of this Act (Aug. 7, 1998), the Secretary shall submit a

report to the Congress on the results of the study conducted under

paragraph (1).''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1790d of this title.

-CITE-

12 USC Sec. 1758 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1758. Bylaws

-STATUTE-

In order to simplify the organization of Federal credit unions

the Board shall from time to time cause to be prepared a form of

organization certificate and a form of bylaws consistent with this

chapter, which shall be used by Federal credit union incorporators,

and shall be supplied to them on request. At the time of

presenting the organization certificate the incorporators shall

also submit proposed bylaws to the Board for its approval.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 108, formerly Sec. 8, 48

Stat. 1219; 1947 Reorg. Plan No. 1, Sec. 401, eff. July 1, 1947,

12 F.R. 4534, 61 Stat. 952; June 29, 1948, ch. 711, Sec. 1, 2, 62

Stat. 1091; renumbered Sec. 9 and amended Pub. L. 86-354, Sec. 1,

Sept. 22, 1959, 73 Stat. 631; Pub. L. 91-206, Sec. 2(1), Mar. 10,

1970, 84 Stat. 49; renumbered title I, Sec. 108, Pub. L. 91-468,

Sec. 1(2), Oct. 19, 1970, 84 Stat. 994; amended Pub. L. 95-630,

title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681.)

-MISC1-

AMENDMENTS

1978 - Pub. L. 95-630 substituted ''Board'' for ''Administrator''

in two places, and ''its approval'' for ''his approval''.

1970 - Pub. L. 91-206 substituted ''Administrator'' for

''Director'' in two places.

1959 - Pub. L. 86-354 substituted ''from time to time'' for '',

upon the passage of this Act,''.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-TRANS-

TRANSFER OF FUNCTIONS

Transfer of functions of Farm Credit Administration and Governor

thereof, generally, see notes set out under section 1751 of this

title.

Functions of Governor of Farm Credit Administration under this

section transferred to Federal Deposit Insurance Corporation by

Reorg. Plan No. 1 of 1947.

-CITE-

12 USC Sec. 1759 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1759. Membership

-STATUTE-

(a) In general

Subject to subsection (b) of this section, Federal credit union

membership shall consist of the incorporators and such other

persons and incorporated and unincorporated organizations, to the

extent permitted by rules and regulations prescribed by the Board,

as may be elected to membership and as such shall each, subscribe

to at least one share of its stock and pay the initial installment

thereon and a uniform entrance fee if required by the board of

directors. Shares may be issued in joint tenancy with right of

survivorship with any persons designated by the credit union

member, but no joint tenant shall be permitted to vote, obtain

loans, or hold office, unless he is within the field of membership

and is a qualified member.

(b) Membership field

Subject to the other provisions of this section, the membership

of any Federal credit union shall be limited to the membership

described in one of the following categories:

(1) Single common-bond credit union

One group that has a common bond of occupation or association.

(2) Multiple common-bond credit union

More than one group -

(A) each of which has (within the group) a common bond of

occupation or association; and

(B) the number of members, each of which (at the time the

group is first included within the field of membership of a

credit union described in this paragraph) does not exceed any

numerical limitation applicable under subsection (d) of this

section.

(3) Community credit union

Persons or organizations within a well-defined local community,

neighborhood, or rural district.

(c) Exceptions

(1) Grandfathered members and groups

(A) In general

Notwithstanding subsection (b) of this section -

(i) any person or organization that is a member of any

Federal credit union as of August 7, 1998, may remain a

member of the credit union after August 7, 1998; and

(ii) a member of any group whose members constituted a

portion of the membership of any Federal credit union as of

August 7, 1998, shall continue to be eligible to become a

member of that credit union, by virtue of membership in that

group, after August 7, 1998.

(B) Successors

If the common bond of any group referred to in subparagraph

(A) is defined by any particular organization or business

entity, subparagraph (A) shall continue to apply with respect

to any successor to the organization or entity.

(2) Exception for underserved areas

Notwithstanding subsection (b) of this section, in the case of

a Federal credit union, the field of membership category of which

is described in subsection (b)(2) of this section, the Board may

allow the membership of the credit union to include any person or

organization within a local community, neighborhood, or rural

district if -

(A) the Board determines that the local community,

neighborhood, or rural district -

(i) is an ''investment area'', as defined in section

4702(16) of this title, and meets such additional

requirements as the Board may impose; and

(ii) is underserved, based on data of the Board and the

Federal banking agencies (as defined in section 1813 of this

title), by other depository institutions (as defined in

section 461(b)(1)(A) of this title); and

(B) the credit union establishes and maintains an office or

facility in the local community, neighborhood, or rural

district at which credit union services are available.

(d) Multiple common-bond credit union group requirements

(1) Numerical limitation

Except as provided in paragraph (2), only a group with fewer

than 3,000 members shall be eligible to be included in the field

of membership category of a credit union described in subsection

(b)(2) of this section.

(2) Exceptions

In the case of any Federal credit union, the field of

membership category of which is described in subsection (b)(2) of

this section, the numerical limitation in paragraph (1) of this

subsection shall not apply with respect to -

(A) any group that the Board determines, in writing and in

accordance with the guidelines and regulations issued under

paragraph (3), could not feasibly or reasonably establish a new

single common-bond credit union, the field of membership

category of which is described in subsection (b)(1) of this

section because -

(i) the group lacks sufficient volunteer and other

resources to support the efficient and effective operation of

a credit union;

(ii) the group does not meet the criteria that the Board

has determined to be important for the likelihood of success

in establishing and managing a new credit union, including

demographic characteristics such as geographical location of

members, diversity of ages and income levels, and other

factors that may affect the financial viability and stability

of a credit union; or

(iii) the group would be unlikely to operate a safe and

sound credit union;

(B) any group transferred from another credit union -

(i) in connection with a merger or consolidation

recommended by the Board or any appropriate State credit

union supervisor based on safety and soundness concerns with

respect to that other credit union; or

(ii) by the Board in the Board's capacity as conservator or

liquidating agent with respect to that other credit union; or

(C) any group transferred in connection with a voluntary

merger, having received conditional approval by the

Administration of the merger application prior to October 25,

1996, but not having consummated the merger prior to October

25, 1996, if the merger is consummated not later than 180 days

after August 7, 1998.

(3) Regulations and guidelines

The Board shall issue guidelines or regulations, after notice

and opportunity for comment, setting forth the criteria that the

Board will apply in determining under this subsection whether or

not an additional group may be included within the field of

membership category of an existing credit union described in

subsection (b)(2) of this section.

(e) Additional membership eligibility provisions

(1) Membership eligibility limited to immediate family or

household members

No individual shall be eligible for membership in a credit

union on the basis of the relationship of the individual to

another person who is eligible for membership in the credit

union, unless the individual is a member of the immediate family

or household (as those terms are defined by the Board, by

regulation) of the other person.

(2) Retention of membership

Except as provided in section 1764 of this title, once a person

becomes a member of a credit union in accordance with this

subchapter, that person or organization may remain a member of

that credit union until the person or organization chooses to

withdraw from the membership of the credit union.

(f) Criteria for approval of expansion of multiple common-bond

credit unions

(1) In general

The Board shall -

(A) encourage the formation of separately chartered credit

unions instead of approving an application to include an

additional group within the field of membership of an existing

credit union whenever practicable and consistent with

reasonable standards for the safe and sound operation of the

credit union; and

(B) if the formation of a separate credit union by the group

is not practicable or consistent with the standards referred to

in subparagraph (A), require the inclusion of the group in the

field of membership of a credit union that is within reasonable

proximity to the location of the group whenever practicable and

consistent with reasonable standards for the safe and sound

operation of the credit union.

(2) Approval criteria

The Board may not approve any application by a Federal credit

union, the field of membership category of which is described in

subsection (b)(2) of this section to include any additional group

within the field of membership of the credit union (or an

application by a Federal credit union described in subsection

(b)(1) of this section to include an additional group and become

a credit union described in subsection (b)(2) of this section),

unless the Board determines, in writing, that -

(A) the credit union has not engaged in any unsafe or unsound

practice (as defined in section 1786(b) of this title) that is

material during the 1-year period preceding the date of filing

of the application;

(B) the credit union is adequately capitalized;

(C) the credit union has the administrative capability to

serve the proposed membership group and the financial resources

to meet the need for additional staff and assets to serve the

new membership group;

(D) any potential harm that the expansion of the field of

membership of the credit union may have on any other insured

credit union and its members is clearly outweighed in the

public interest by the probable beneficial effect of the

expansion in meeting the convenience and needs of the members

of the group proposed to be included in the field of

membership; and

(E) the credit union has met such additional requirements as

the Board may prescribe, by regulation.

(g) Regulations required for community credit unions

(1) Definition of well-defined local community, neighborhood, or

rural district

The Board shall prescribe, by regulation, a definition for the

term ''well-defined local community, neighborhood, or rural

district'' for purposes of -

(A) making any determination with regard to the field of

membership of a credit union described in subsection (b)(3) of

this section; and

(B) establishing the criteria applicable with respect to any

such determination.

(2) Scope of application

The definition prescribed by the Board under paragraph (1)

shall apply with respect to any application to form a new credit

union, or to alter or expand the field of membership of an

existing credit union, that is filed with the Board after August

7, 1998.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 109, formerly Sec. 9, 48

Stat. 1219; July 31, 1946, ch. 711, Sec. 2, 60 Stat. 744; 1947

Reorg. Plan No. 1, Sec. 401, eff. July 1, 1947, 12 F.R. 4534, 61

Stat. 952; June 29, 1948, ch. 711, Sec. 1, 2, 62 Stat. 1091;

renumbered Sec. 10 and amended Pub. L. 86-354, Sec. 1, Sept. 22,

1959, 73 Stat. 631; Pub. L. 91-206, Sec. 2(1), Mar. 10, 1970, 84

Stat. 49; renumbered title I, Sec. 109, Pub. L. 91-468, Sec. 1(2),

Oct. 19, 1970, 84 Stat. 994; amended Pub. L. 93-383, title VII,

Sec. 722, Aug. 22, 1974, 88 Stat. 719; Pub. L. 95-630, title V,

Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681; Pub. L. 105-219, title

I, Sec. 101-103, Aug. 7, 1998, 112 Stat. 914-917.)

-MISC1-

AMENDMENTS

1998 - Subsec. (a). Pub. L. 105-219, Sec. 101(1)(A), designated

existing provisions as subsec. (a) and inserted heading and

''Subject to subsection (b) of this section,'' before ''Federal

credit union membership shall consist of''.

Pub. L. 105-219, Sec. 101(1)(B), which directed the amendment of

subsec. (a) by striking out '', except that Federal credit union

membership shall be limited to groups having a common bond of

occupation or association, or to groups within a well-defined

neighborhood, community, or rural district'' after ''directors'',

was executed by striking out such language which began with a

semicolon rather than a comma after ''directors'' to reflect the

probable intent of Congress.

Subsecs. (b) to (e). Pub. L. 105-219, Sec. 101(2), added subsecs.

(b) to (e).

Subsec. (f). Pub. L. 105-219, Sec. 102, added subsec. (f).

Subsec. (g). Pub. L. 105-219, Sec. 103, added subsec. (g).

1978 - Pub. L. 95-630 substituted ''Board'' for

''Administrator''.

1974 - Pub. L. 93-383 substituted ''a uniform entrance fee if

required by the board of directors'' for ''the entrance fee''.

1970 - Pub. L. 91-206 substituted ''Administrator'' for

''Director''.

1959 - Pub. L. 86-354 substituted ''persons'' for ''person''

before ''designated''.

1946 - Act July 31, 1946, inserted sentence at end permitting a

Federal credit union to issue shares in joint tenancy with a right

of survivorship.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-TRANS-

TRANSFER OF FUNCTIONS

Transfer of functions of Farm Credit Administration and Governor

thereof, generally, see notes set out under section 1751 of this

title.

Functions of Governor of Farm Credit Administration under this

section transferred to Federal Deposit Insurance Corporation by

Reorg. Plan No. 1 of 1947.

-MISC5-

REPORT AND CONGRESSIONAL REVIEW REQUIREMENT FOR CERTAIN REGULATIONS

Pub. L. 105-219, title II, Sec. 205, Aug. 7, 1998, 112 Stat. 923,

provided that: ''A regulation prescribed by the Board (National

Credit Union Administration Board) shall be treated as a major rule

for purposes of chapter 8 of title 5, United States Code, if the

regulation defines, or amends the definition of -

''(1) the term 'immediate family or household' for purposes of

section 109(e)(1) of the Federal Credit Union Act (12 U.S.C.

1759(e)(1)) (as added by section 101 of this Act); or

''(2) the term 'well-defined local community, neighborhood, or

rural district' for purposes of section 109(g) of the Federal

Credit Union Act (as added by section 103 of this Act).''

-CITE-

12 USC Sec. 1760 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1760. Members' meetings

-STATUTE-

The fiscal year of all Federal credit unions shall end December

31. The annual meeting of each Federal credit union shall be held

at such place as its bylaws shall prescribe. Special meetings may

be held in the manner indicated in the bylaws. No member shall be

entitled to vote by proxy, but a member other than a natural person

may vote through an agent designated for the purpose. Irrespective

of the number of shares held, no member shall have more than one

vote.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 110, formerly Sec. 10, 48

Stat. 1219; renumbered Sec. 11, Pub. L. 86-354, Sec. 1, Sept. 22,

1959, 73 Stat. 631; amended Pub. L. 88-150, Sec. 1, Oct. 17, 1963,

77 Stat. 270; renumbered title I, Sec. 110, Pub. L. 91-468, Sec.

1(2), Oct. 19, 1970, 84 Stat. 994; amended Pub. L. 97-320, title V,

Sec. 519, Oct. 15, 1982, 96 Stat. 1531.)

-MISC1-

AMENDMENTS

1982 - Pub. L. 97-320 struck out ''at such time during the

following January, February, or March and'' after ''shall be

held'', and ''by him'' after ''shares held''.

1963 - Pub. L. 88-150 substituted ''during the following January,

February, or March'' for ''during the month of the following

January''.

-CITE-

12 USC Sec. 1761 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1761. Management

-STATUTE-

(a) Board of directors, credit committee, and supervisory

committee; election to board

The management of a Federal credit union shall be by a board of

directors, a supervisory committee, and where the bylaws so

provide, a credit committee. The board shall consist of an odd

number of directors, at least five in number, to be elected

annually by and from the members as the bylaws provide. Any

vacancy occurring on the board shall be filled until the next

annual election by appointment by the remainder of the directors.

(b) Membership on supervisory committee; names and addresses of

officers and committee members

The supervisory committee shall be appointed by the board of

directors and shall consist of not less than three members nor more

than five members, one of whom may be a director other than the

compensated officer of the board. A record of the names and

addresses of the executive officers, members of the supervisory

committee, credit committee, and loan officers, shall be filed with

the Administration within ten days after their election or

appointment.

(c) Compensation

No member of the board or of any other committee shall, as such,

be compensated, except that reasonable health, accident, similar

insurance protection, and the reimbursement of reasonable expenses

incurred in the execution of the duties of the position shall not

be considered compensation.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 111, formerly Sec. 11, 48

Stat. 1219; June 15, 1940, ch. 366, 54 Stat. 398; July 31, 1946,

ch. 711, Sec. 3-6, 60 Stat. 745; 1947 Reorg. Plan No. 1, Sec. 401,

eff. July 1, 1947, 12 F.R. 4534, 61 Stat. 952; June 29, 1948, ch.

711, Sec. 1, 2, 62 Stat. 1091; Oct. 25, 1949, ch. 713, Sec. 2, 63

Stat. 890; June 30, 1954, ch. 426, Sec. 1, 68 Stat. 335; Aug. 24,

1954, ch. 905, Sec. 1, 2, 68 Stat. 792; renumbered Sec. 12 and

amended Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat. 632; Pub.

L. 88-353, Sec. 2, July 2, 1964, 78 Stat. 269; Pub. L. 91-206, Sec.

2(3), Mar. 10, 1970, 84 Stat. 49; renumbered title I, Sec. 111,

Pub. L. 91-468, Sec. 1(2), Oct. 19, 1970, 84 Stat. 994; amended

Pub. L. 93-495, title I, Sec. 116, Oct. 28, 1974, 88 Stat. 1507;

Pub. L. 95-630, title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681;

Pub. L. 97-320, title V, Sec. 520, Oct. 15, 1982, 96 Stat. 1531.)

-MISC1-

AMENDMENTS

1982 - Pub. L. 97-320 substituted provisions divided into

subsecs. (a), (b), and (c) relating to the management of a Federal

credit union, including the board of directors, credit and

supervisory committees, and the matter of their compensation, for

provisions which read as follows: ''The business affairs of a

Federal credit union shall be managed by a board of not less than

five directors, and a credit committee of not less than three

members, all to be elected at the annual members' meeting by and

from the members, and by a supervisory committee of not less than

three members nor more than five members, one of whom may be a

director other than the treasurer, to be appointed by the board.

Any vacancy occurring in the supervisory committee shall be filled

in the same manner as original appointments to such committee. All

members of the board and of such committees shall hold office for

such terms, respectively, as the bylaws may provide. A record of

the names and addresses of the members of the board and such

committees and of the officers of the credit union shall be filed

with the Administration within ten days after their election or

appointment. No member of the board or of either such committee

shall, as such, be compensated: Provided, however, That reasonable

health, accident, and similar insurance protection shall not be

considered compensation under regulations promulgated by the

Board.''

1978 - Pub. L. 95-630 substituted ''Board'' for

''Administrator''.

1974 - Pub. L. 93-495 inserted proviso relating to compensation

in the form of health, accident, and similar insurance protection.

1970 - Pub. L. 91-206 substituted ''Administration'' for

''Bureau''.

1964 - Pub. L. 88-353 increased size of supervisory committee

from three members to not less than three members nor more than

five members.

1959 - Pub. L. 86-354 provided for appointment instead of

election of members of supervisory committee and for filling of

vacancies in such committee, and struck out former subsecs. (b) to

(e) relating to officers, directors, credit committee and

supervisory committee. See sections 1761a to 1761d of this title,

respectively.

1954 - Subsecs. (b), (c). Act Aug. 24, 1954, provided express

authority for the Director of the Bureau of Federal Credit Unions

to regulate the minimum amount and character of surety bonds for

officers and employees.

Subsec. (c). Act June 30, 1954, inserted provision with respect

to interest refunds.

1949 - Subsec. (d). Act Oct. 25, 1949, substituted ''$400'' for

''$300'' wherever appearing.

1946 - Subsec. (c). Act July 31, 1946, struck out ''fix the

amount and character of the surety bond required of any officer

having custody of funds'' and inserted ''require any officer or

employee having custody of or handling funds to give bond with good

and sufficient surety in an amount and character to be determined,

from time to time, by the board and authorize the payment of the

premium or premiums therefor from the funds of the Federal credit

union''.

Subsec. (d). Act July 31, 1946, struck out requirement that

notice of meeting of the credit committee must be given by the

treasurer and increased the maximum amount of an unsecured loan to

a member from $100 to $300.

Subsec. (e). Act July 31, 1946, inserted last sentence defining

''passbook''.

1940 - Subsec. (d). Act June 15, 1940, substituted ''$100'' for

''$50'' in fourth sentence.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-TRANS-

TRANSFER OF FUNCTIONS

Transfer of functions of Farm Credit Administration and Governor

thereof, generally, see notes set out under section 1751 of this

title.

Functions of Governor of Farm Credit Administration under this

section transferred to Federal Deposit Insurance Corporation by

Reorg. Plan No. 1 of 1947.

-CITE-

12 USC Sec. 1761a 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1761a. Officers of the board

-STATUTE-

At their first meeting after the annual meeting of the members,

the directors shall elect from their number the board officers

specified in the bylaws. Only one board officer may be compensated

as an officer of the board and the bylaws shall specify such

position as well as the specific duties of each of the board

officers. The board shall elect from their number a financial

officer who shall give adequate fidelity coverage in accordance

with section 1761b(2) of this title.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 112, formerly Sec. 13, as

added Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat. 632; amended

Pub. L. 88-150, Sec. 2, Oct. 17, 1963, 77 Stat. 270; Pub. L.

91-206, Sec. 2(1), Mar. 10, 1970, 84 Stat. 49; renumbered title I,

Sec. 112, Pub. L. 91-468, Sec. 1(2), Oct. 19, 1970, 84 Stat. 994;

amended Pub. L. 95-630, title V, Sec. 502(b), Nov. 10, 1978, 92

Stat. 3681; Pub. L. 97-320, title V, Sec. 521, Oct. 15, 1982, 96

Stat. 1531; Pub. L. 100-86, title VII, Sec. 704(a), Aug. 10, 1987,

101 Stat. 652.)

-MISC1-

PRIOR PROVISIONS

Provisions similar to those comprising this section were

contained in section 11(b) of act June 26, 1934, ch. 750, 48 Stat.

1219 (formerly classified to section 1761(b) of this title), prior

to the amendment and renumbering of act June 26, 1934, by Pub. L.

86-354.

AMENDMENTS

1987 - Pub. L. 100-86 inserted third sentence and struck out

former third sentence which read as follows: ''The board shall

elect from their number a financial officer who shall give bond

with good and sufficient surety, in an amount and character to be

determined by the board of directors in compliance with regulations

prescribed from time to time by the Board conditioned upon the

faithful performance of the officer's trust.''

1982 - Pub. L. 97-320 substituted provisions relating to the

officers of the board for provisions which read: ''At their first

meeting after the annual meeting of the members, the directors

shall elect from their number a president, one or more vice

presidents, a secretary, and a treasurer, who shall be the

executive officers of the corporation. No executive officer,

except the treasurer, shall be compensated as such. The offices of

secretary and treasurer may be held by the same person. The duties

of the officers shall be as determined by the bylaws. Before the

treasurer shall enter upon his duties he shall give bond with good

and sufficient surety, in an amount and character to be determined

by the board of directors in compliance with regulations prescribed

from time to time by the Board, conditioned upon the faithful

performance of his trust.''

1978 - Pub. L. 95-630 substituted ''Board'' for

''Administrator''.

1970 - Pub. L. 91-206 substituted ''Administrator'' for

''Director''.

1963 - Pub. L. 88-150 struck out '', except that the treasurer

shall be the general manager of the corporation'' after ''bylaws''

in fourth sentence.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-CITE-

12 USC Sec. 1761b 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1761b. Board of directors; meetings; powers and duties;

executive committee; membership officers; membership

application

-STATUTE-

The board of directors shall meet at least once a month and shall

have the general direction and control of the affairs of the

Federal credit union. Minutes of all meetings shall be kept.

Among other things, the board of directors shall -

(1) act upon applications for membership or appoint membership

officers from among the members of the credit union, other than

the board member paid as an officer, the financial board officer,

any assistant to the paid officer of the board or to the

financial officer, or any loan officer;

(2) provide adequate fidelity coverage for officers and

employees having custody of or handling funds according to

regulations issued by the Board;

(3) fill vacancies on the board of directors until successors

elected at the next annual meeting have qualified;

(4) if the bylaws provide for an elected credit committee, fill

vacancies on the credit committee until successors elected at the

next annual meeting have qualified;

(5) appoint the members of the supervisory committee and, if

the bylaws so provide, appoint the members of the credit

committee;

(6) have charge of investments including the right to designate

an investment committee of not less than two to act on its

behalf;

(7) determine the maximum number of shares, share certificates,

and share draft accounts, and the classes of shares, share

certificates, and share draft accounts;

(8) subject to any limitations of this subchapter, determine

the interest rates on loans, the security, and the maximum amount

which may be loaned and provided in lines of credit;

(9) authorize interest refunds to members of record at the

close of business on the last day of any dividend period from

income earned and received in proportion to the interest paid by

them during that dividend period;

(10) if the bylaws so provide, appoint one or more loan

officers and delegate to these officers the power to approve or

disapprove loans, lines of credit, or advances from lines of

credit;

(11) establish the par value of the share;

(12) subject to the limitations of this subchapter and the

bylaws of the credit union, provide for the hiring and

compensation of officers and employees;

(13) if the bylaws so provide, appoint an executive committee

of not less than three directors to act on its behalf and any

other committees to which it can delegate specific functions;

(14) prescribe conditions and limitations for any committee

which it appoints;

(15) review at each monthly meeting a list of approved or

pending applications for membership received since the previous

monthly meeting together with such other related information as

it or the bylaws require;

(16) provide for the furnishing of the written reasons for any

denial of a membership application to the applicant upon the

written request of the applicant;

(17) in the absence of a credit committee, and upon the written

request of a member, review a loan application denied by a loan

officer;

(18) declare the dividend rate to be paid on shares, share

certificates, and share draft accounts pursuant to the terms and

conditions of section 1763 of this title;

(19) establish and maintain a system of internal controls

consistent with the regulations of the Board;

(20) establish lending policies; and

(21) do all other things that are necessary and proper to carry

out all the purposes and powers of the Federal credit union,

subject to regulations issued by the Board.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 113, formerly Sec. 14, as

added Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat. 632; amended

Pub. L. 88-353, Sec. 3, July 2, 1964, 78 Stat. 269; Pub. L. 90-375,

Sec. 1(4), July 5, 1968, 82 Stat. 284; Pub. L. 91-206, Sec. 2(1),

Mar. 10, 1970, 84 Stat. 49; renumbered title I, Sec. 113, Pub. L.

91-468, Sec. 1(2), Oct. 19, 1970, 84 Stat. 994; amended Pub. L.

93-383, title VII, Sec. 723, Aug. 22, 1974, 88 Stat. 719; Pub. L.

95-22, title III, Sec. 309, Apr. 19, 1977, 91 Stat. 53; Pub. L.

95-630, title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681; Pub. L.

97-320, title V, Sec. 522, Oct. 15, 1982, 96 Stat. 1532; Pub. L.

97-457, Sec. 28, Jan. 12, 1983, 96 Stat. 2510; Pub. L. 100-86,

title VII, Sec. 704(b), 705, Aug. 10, 1987, 101 Stat. 652.)

-MISC1-

PRIOR PROVISIONS

Provisions similar to those comprising this section were

contained in section 11(c) of act June 26, 1934, ch. 750, 48 Stat.

1219 (formerly classified to section 1761(c) of this title), prior

to the amendment and renumbering of act June 26, 1934, by Pub. L.

86-354.

AMENDMENTS

1987 - Par. (1). Pub. L. 100-86, Sec. 705, substituted ''of the

credit union'' for ''of the board of directors''.

Par. (2). Pub. L. 100-86, Sec. 704(b), amended par. (2)

generally. Prior to amendment, par. (2) read as follows: ''require

any officer or employee having custody of or handling funds to give

bond with good and sufficient surety in an amount and character in

compliance with regulations of the Board, and authorize the payment

of the premium or premiums therefor from the funds of the Federal

credit union;''.

1983 - Pub. L. 97-457, Sec. 28(1), substituted ''direction'' for

''directions'' after ''shall have the general''.

Par. (2). Pub. L. 97-457, Sec. 28(2), substituted ''union'' for

''unions'' after ''Federal credit''.

Par. (9). Pub. L. 97-457, Sec. 28(3), inserted ''by'' after

''interest paid''.

Par. (15). Pub. L. 97-457, Sec. 28(4), substituted ''meeting''

for ''meetings'' after ''previous monthly''.

1982 - Pub. L. 97-320, Sec. 522, substituted provisions relating

to the board of directors, its meetings, powers, and duties,

membership officers and membership applications, for provisions

which read as follows: ''The board of directors shall meet at least

once a month and shall have the general direction and control of

the affairs of the corporation. Minutes of all such meetings shall

be kept. Among other things they shall act upon applications for

membership; require any officer or employee having custody of or

handling funds to give bond with good and sufficient surety in an

amount and character to be determined by the board of directors in

compliance with regulations prescribed from time to time by the

Board, and authorize the payment of the premium or premiums

therefor from the funds of the Federal credit union; fill vacancies

in the board and in the credit committee until successors elected

at the next annual meeting have qualified; have charge of

investments other than loans to members, except that the board may

designate a committee of not less than two to act as an investment

committee, such investment committee to have charge of making

investments under rules and procedures established by the board of

directors; determine from time to time the maximum number of shares

and share certificates and the classes of shares and share

certificates that may be held; subject to the limitations of this

chapter, determine the interest rates on loans, the security, and

the maximum amount which may be loaned or provided in lines of

credit; subject to such regulations as may be issued by the Board,

authorized an interest refund to members of record at the close of

business on the last day of any dividend period in proportion to

the interest paid by them during that dividend period; and provide

for compensation of necessary clerical and auditing assistance

requested by the supervisory committee, and of loan officers

appointed by the credit committee. The board may appoint an

executive committee of not less than three directors to exercise

such authority as may be delegated to it subject to such conditions

and limitations as may be prescribed by the board. Such executive

committee or one or more membership officers appointed by the board

from among the members of the credit union, other than the

treasurer, an assistant treasurer, or a loan officer, may be

authorized by the board to approve applications for membership

under such conditions as the board may prescribe; except that such

committee or membership officer so authorized shall submit to the

board at each monthly meeting a list of approved or pending

applications for membership received since the previous monthly

meeting, together with such other related information as the bylaws

or the board may require. If a membership application is denied,

the reasons therefor shall be furnished in writing to the person

whose application is denied, upon written request.''

1978 - Pub. L. 95-630 substituted ''Board'' for ''Administrator''

in two places.

1977 - Pub. L. 95-22 substituted ''and share certificates and the

classes of shares and share certificates that may be held'' for

''that may be held by an individual'' and '', the security, and the

maximum amount which may be loaned or provided in lines of credit''

for ''and the maximum amount which may be loaned with or without

security to any member''.

1974 - Pub. L. 93-383 inserted provisions authorizing designation

of a committee of not less than two to act as an investment

committee and provisions relating to denial of a membership

application, substituted ''one or more membership officers'' for

''a membership officer'', and substituted provisions relating to

exercise of authority by the executive committee for provisions

setting forth specified functions of the executive committee.

1970 - Pub. L. 91-206 substituted ''Administrator'' for

''Director'' in two places.

1968 - Pub. L. 90-375 substituted ''the purchase and sale of

securities, the borrowing of funds, and the making of loans to

other credit unions'' for ''the purchase and sale of securities or

the making of loans to other credit unions, or both''.

1964 - Pub. L. 88-353 substituted ''the last day of any dividend

period in proportion to the interest paid by them during that

dividend period'' for ''December 31 in proportion to the interest

paid by them during that year''.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1761a of this title.

-CITE-

12 USC Sec. 1761c 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1761c. Credit committee

-STATUTE-

(a) Members; meetings; lines of credit and approval of loans;

delegation to loan officers

If the bylaws provide for a credit committee, then pursuant to

the provisions of the bylaws, the board of directors may appoint or

the members may elect a credit committee which shall consist of an

odd number of members of the credit union, but which shall not

include more than one loan officer. The method used shall be set

forth in the bylaws. The credit committee shall hold such meetings

as the business of the Federal credit union may require, not less

frequently than once a month, to consider applications for loans or

lines of credit. Reasonable notice of such meetings shall be given

to all members of the committee. Except for those loans or lines

of credit required to be approved by the board of directors in

section 1757(5) of this title, approval of an application shall be

by majority of the committee who are present at the meeting at

which it is considered provided that a majority of the full

committee is present. The credit committee may appoint and

delegate to loan officers the authority to approve applications.

(b) Review and reversal of loan refusals; review by board in lieu

of committee; limitation on disbursements by loan officers

If the bylaws provide for a credit committee, all applications

not approved by the loan officer shall be reviewed by the credit

committee, and the approval of a majority of the members who are

present at the meeting when such review is undertaken shall be

required to reverse the loan officer's decision provided a majority

of the full committee is present. If there is not a credit

committee, a member shall have the right upon written request of

review by the board of directors of a loan application which has

been denied. No individual shall have authority to disburse funds

of the Federal credit union with respect to any loan or line of

credit for which the application has been approved by him in his

capacity as a loan officer.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 114, formerly Sec. 15, as

added Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat. 633; amended

Pub. L. 88-353, Sec. 4, July 2, 1964, 78 Stat. 269; Pub. L. 90-188,

Sec. 1, Dec. 13, 1967, 81 Stat. 567; Pub. L. 90-375, Sec. 1(5),

July 5, 1968, 82 Stat. 284; Pub. L. 91-206, Sec. 2(1), Mar. 10,

1970, 84 Stat. 49; renumbered title I, Sec. 114, Pub. L. 91-468,

Sec. 1(2), Oct. 19, 1970, 84 Stat. 994; amended Pub. L. 95-22,

title III, Sec. 304, Apr. 19, 1977, 91 Stat. 51; Pub. L. 95-630,

title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681; Pub. L. 97-320,

title V, Sec. 523, Oct. 15, 1982, 96 Stat. 1533.)

-MISC1-

PRIOR PROVISIONS

Provisions similar to those comprising this section were

contained in section 11(d) of act June 26, 1934, ch. 750, 48 Stat.

1219 (formerly classified to section 1761(d) of this title), prior

to the amendment and renumbering of act June 26, 1934 by Pub. L.

86-354.

AMENDMENTS

1982 - Pub. L. 97-320 designated existing provisions as subsecs.

(a) and (b), in subsec. (a) as so designated, inserted provisions

relating to the membership of the committee and provisions

requiring the majority of the full committee to be present for

votes on lines of credit, struck out provision requiring each loan

officer to report his action on an application in seven days of its

filing, in subsec. (b) as so designated, inserted provisions

relating to the number of members needed to reverse a loan

officer's decision and provision for the case where there is no

credit committee, and thereafter struck out provisions that not

more than one member of the committee might be appointed as a loan

officer, that applications for loans and lines of credit be made on

forms prepared by such committee which set forth the security, if

any, and such other data as required, that no loan may be made to

any member if, upon the making of that loan, the member would have

been indebted to the Federal credit union upon loans made to him in

an aggregate amount which would exceed 10 per centum of the credit

union's unimpaired capital and surplus, and that for the purposes

of this section an assignment of shares or the endorsement of a

note would be deemed security and, subject to such regulations as

the Board prescribed, insurance obtained under title I of the

National Housing Act (12 U.S.C. 1702 et seq.) would be deemed

adequate security.

1978 - Pub. L. 95-630 substituted ''Board'' for

''Administrator''.

1977 - Pub. L. 95-22 substituted ''loans and lines of credit''

for ''loans'' in three places, ''Except for those loans or lines of

credit required to be approved by the board of directors in section

1757(5) of this title, approval of an application shall be'' for

''No loan shall be made unless it is approved'', ''application

approved'' for ''loan approved'', ''applications not approved'' for

''loans not approved'', and ''with respect to any loan or line of

credit for which the application'' for ''for any loan which'' and

struck out ''the purpose for which the loan is desired'' after

''which shall set forth'', ''$200 or'' after ''amount which would

exceed'', ''whichever is greater'' after ''capital and surplus'',

and provision relating to requirement that no unsecured loan be

made to a member which would make the member indebted to the

Federal credit union in excess of a specified amount.

1970 - Pub. L. 91-206 substituted ''Administrator'' for

''Director''.

1968 - Pub. L. 90-375 substituted provisions which increased the

unsecured loan limit, in the case of a credit union whose

unimpaired capital and surplus is less than $8,000 to $200, and, in

the case of any other credit union to $2,500 or 2 1/2% of the

unimpaired capital and surplus, whichever is less, for provisions

which authorized credit unions to make unsecured loans of $750 or

10% of their unimpaired capital and surplus, whichever is smaller.

1967 - Pub. L. 90-188 struck out ''up to the unsecured limit, or

in excess of such limit if such excess is fully secured by

unpledged shares'' from end of provision that credit committees may

appoint one or more loan officers, and delegate to him or them the

power to approve loans.

1964 - Pub. L. 88-353 inserted ''and, subject to such regulations

as the Director may prescribe, insurance obtained under title I of

the National Housing Act shall be deemed adequate security''.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630 set out as a note under section 1752 of this

title.

-CITE-

12 USC Sec. 1761d 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1761d. Supervisory committee; powers and duties; suspension of

members; passbook

-STATUTE-

The supervisory committee shall make or cause to be made an

annual audit and shall submit a report of that audit to the board

of directors and a summary of the report to the members at the next

annual meeting of the credit union; shall make or cause to be made

such supplementary audits as it deems necessary or as may be

ordered by the Board, and submit reports of the supplementary

audits to the board of directors; may by a unanimous vote suspend

any officer of the credit union or any member of the credit

committee or of the board of directors, until the next members'

meeting, which shall be held not less than seven or more than

fourteen days after any such suspension, at which meeting any such

suspension shall be acted upon by the members; and may call by a

majority vote a special meeting of the members to consider any

violations of this chapter, the charter, or the bylaws, or any

practice of the credit union deemed by the supervisory committee to

be unsafe or unauthorized. Any member of the supervisory committee

may be suspended by a majority vote of the board of directors. The

members shall decide, at a meeting held not less than seven nor

more than fourteen days after any such suspension, whether the

suspended committee member shall be removed from or restored to the

supervisory committee. The supervisory committee shall cause the

passbooks and accounts of the members to be verified with the

records of the treasurer from time to time, and not less frequently

than once every two years. As used in this section, the term

''passbook'' shall include any book, statement of account, or other

record approved by the Board for use by Federal credit unions.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 115, formerly Sec. 16, as

added Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat. 633; amended

Pub. L. 90-375, Sec. 1(6), (7), July 5, 1968, 82 Stat. 284, 285;

Pub. L. 91-206, Sec. 2(1), Mar. 10, 1970, 84 Stat. 49; renumbered

title I, Sec. 115, Pub. L. 91-468, Sec. 1(2), Oct. 19, 1970, 84

Stat. 994; amended Pub. L. 93-383, title VII, Sec. 724, Aug. 22,

1974, 88 Stat. 719; Pub. L. 95-630, title V, Sec. 502(b), Nov. 10,

1978, 92 Stat. 3681.)

-MISC1-

PRIOR PROVISIONS

Provisions similar to those comprising this section were

contained in section 11(e) of act June 26, 1934, ch. 750, 48 Stat.

1219 (formerly classified to section 1761(e) of this title), prior

to the amendment and renumbering of act June 26, 1934 by Pub. L.

86-354.

AMENDMENTS

1978 - Pub. L. 95-630 substituted ''Board'' for

''Administrator''.

1974 - Pub. L. 93-383 substituted ''an annual'' for ''a

semiannual''.

1970 - Pub. L. 91-206 substituted ''Administrator'' for

''Director'' in two places.

1968 - Pub. L. 90-375 substituted provisions which required a

semiannual audit for provisions which required a quarterly

examination of the affairs of a Federal credit union, including an

audit of the books, authorized the making of such supplementary

audits as deemed necessary by the supervisory committee or as

ordered by the Director, eliminated the requirement of an annual

audit, and provided that the suspension of any member of the

supervisory committee be pursuant to a majority vote of the board

of directors.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-CITE-

12 USC Sec. 1762 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1762. Repealed. Pub. L. 105-219, title III, Sec. 301(g)(3),

Aug. 7, 1998, 112 Stat. 931

-MISC1-

Section, acts June 26, 1934, ch. 750, title I, Sec. 116, formerly

Sec. 12, 48 Stat. 1221; Oct. 25, 1949, ch. 713, Sec. 3, 63 Stat.

890; renumbered Sec. 17 and amended Pub. L. 86-354, Sec. 1, Sept.

22, 1959, 73 Stat. 634; Pub. L. 91-206, Sec. 2(1), Mar. 10, 1970,

84 Stat. 49; renumbered title I, Sec. 116, and amended Pub. L.

91-468, Sec. 1(2), 9, Oct. 19, 1970, 84 Stat. 994, 1017; Pub. L.

95-22, title III, Sec. 305, Apr. 19, 1977, 91 Stat. 52; Pub. L.

95-630, title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681, related

to requirement of reserves against losses and authorization of

Board to decrease reserve requirement or to require special

reserves. See section 1790d(e) of this title.

-CITE-

12 USC Sec. 1763 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1763. Dividends

-STATUTE-

At such intervals as the board of directors may authorize, and

after provision for required reserves, the board of directors may

declare a dividend to be paid at different rates on different types

of shares, at different rates and maturity dates in the case of

share certificates, and at different rates on different types of

share draft accounts. Dividends credited may be accrued on various

types of shares, share certificates, and share draft accounts as

authorized by the board of directors. If the par value of a share

exceeds $5, dividends shall be paid on all funds in the regular

share account once a full share has been purchased.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 117, formerly Sec. 13, 48

Stat. 1221; renumbered Sec. 18 and amended Pub. L. 86-354, Sec. 1,

Sept. 22, 1959, 73 Stat. 634; Pub. L. 90-188, Sec. 2, Dec. 13,

1967, 81 Stat. 567; renumbered title I, Sec. 117, Pub. L. 91-468,

Sec. 1(2), Oct. 19, 1970, 84 Stat. 994; amended Pub. L. 93-383,

title VII, Sec. 725, Aug. 22, 1974, 88 Stat. 720; Pub. L. 95-22,

title III, Sec. 310, Apr. 19, 1977, 91 Stat. 53; Pub. L. 95-630,

title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681; Pub. L. 96-221,

title II, Sec. 207(b)(10), title III, Sec. 305(c), Mar. 31, 1980,

94 Stat. 144, 147; Pub. L. 97-320, title V, Sec. 524, Oct. 15,

1982, 96 Stat. 1534.)

-MISC1-

AMENDMENTS

1982 - Pub. L. 97-320 substituted ''the board of directors may

declare'' for ''the board may declare'' and ''Dividends credited''

for ''Dividend credit'', and inserted provision that if the par

value of a share exceeds $5, dividends shall be paid on all funds

in the regular share account once a full share has been published.

1980 - Pub. L. 96-221, Sec. 207(b)(10), struck out '', pursuant

to such regulations as may be issued by the Board,'' after

''declare''.

Pub. L. 96-221, Sec. 305(c), inserted provisions relating to

share draft accounts.

1978 - Pub. L. 95-630 substituted ''Board'' for

''Administrator''.

1977 - Pub. L. 95-22 substituted ''the board may declare,

pursuant to such regulations as may be issued by the Administrator,

a dividend to be paid at different rates on different types of

shares and at different rates and maturity dates in the case of

share certificates'' for ''the board of directors may declare a

dividend to be paid from the remaining net earnings'' and ''accrued

on various types of shares and share certificates'' for ''accrued

on shares'' and struck out provision that such dividends shall be

paid on all paid-up shares outstanding at the end of the period for

which the dividend is declared and provision that shares which

become fully paid up during such dividend period and are

outstanding at the close of the period shall be entitled to a

proportional part of such dividend.

1974 - Pub. L. 93-383 substituted ''At such intervals as the

board of directors may authorize'' for ''Annually, semiannually, or

quarterly, as the bylaws may provide'', and ''Dividend credit may

be accrued on shares as authorized by the board of directors'' for

''Dividend credit for a month may be accrued on shares which are or

become fully paid up during the first ten days of that month''.

1967 - Pub. L. 90-188 inserted ''or quarterly'' after

''semiannually'' and substituted ''ten'' for ''five''.

1959 - Pub. L. 86-354 authorized semiannual dividends, empowered

the board of directors to declare them instead of only recommend

them, and provided for dividend credit.

EFFECTIVE DATE OF 1980 AMENDMENT

Section 207(b) of Pub. L. 96-221 provided in part that the

amendment made by that section is effective 6 years after Mar. 31,

1980.

Amendment by section 305(c) of Pub. L. 96-221 effective at close

of Mar. 31, 1980, see section 306 of Pub. L. 96-221, set out as a

note under section 371a of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1761b, 3502 of this

title.

-CITE-

12 USC Sec. 1764 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1764. Expulsion and withdrawal

-STATUTE-

(a) Expulsion by two-thirds vote

Except as provided in subsection (b) of this section, a member

may be expelled by a two-thirds vote of the members of a Federal

credit union present at a special meeting called for the purpose,

but only after opportunity has been given him to be heard.

(b) Expulsion based on nonparticipation

The board of directors of a Federal credit union may, by majority

vote of a quorum of directors, adopt and enforce a policy with

respect to expulsion from membership based on nonparticipation by a

member in the affairs of the credit union. In establishing its

policy, the board should consider a member's failure to vote in

annual credit union elections or failure to purchase shares from,

obtain a loan from, or lend to the Federal credit union. If such a

policy is adopted, written notice of the policy as adopted and the

effective date of such policy shall be mailed to each member of the

credit union at the member's current address appearing on the

records of the credit union not less than thirty days prior to the

effective date of such policy. In addition, each new member shall

be provided written notice of any such policy prior to or upon

applying for membership.

(c) Liability to credit union

Withdrawal or expulsion of a member pursuant to either subsection

(a) or (b) of this section shall not operate to relieve him from

liability to the Federal credit union. The amount to be paid a

withdrawing or expelled member by a Federal credit union shall be

determined and paid in a manner specified in the bylaws.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 118, formerly Sec. 14, 48

Stat. 1221; renumbered Sec. 19, Pub. L. 86-354, Sec. 1, Sept. 22,

1959, 73 Stat. 634; renumbered title I, Sec. 118, Pub. L. 91-468,

Sec. 1(2), Oct. 19, 1970, 84 Stat. 994; amended Pub. L. 97-320,

title V, Sec. 525, Oct. 15, 1982, 96 Stat. 1534; Pub. L. 100-86,

title VII, Sec. 706, Aug. 10, 1987, 101 Stat. 653.)

-MISC1-

AMENDMENTS

1987 - Subsec. (a). Pub. L. 100-86, Sec. 706(1), substituted

''Except as provided in'' for ''Subject to''.

Subsec. (b). Pub. L. 100-86, Sec. 706(2), inserted ''and

enforce'' after ''adopt''.

1982 - Pub. L. 97-320 designated existing provisions as subsecs.

(a) and (c) and added subsec. (b).

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1759 of this title.

-CITE-

12 USC Sec. 1765 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1765. Minors

-STATUTE-

Shares may be issued in the name of a minor or in trust, subject

to such conditions as may be prescribed by the bylaws. When shares

are issued in trust, the name of the beneficiary shall be disclosed

to the Federal credit union.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 119, formerly Sec. 15, 48

Stat. 1221; renumbered Sec. 20, and amended Pub. L. 86-354, Sec. 1,

Sept. 22, 1959, 73 Stat. 634; renumbered title I, Sec. 119, Pub. L.

91-468, Sec. 1(2), Oct. 19, 1970, 84 Stat. 994.)

-MISC1-

AMENDMENTS

1959 - Pub. L. 86-354 substituted ''When shares are issued in

trust, the'' for ''The'' in second sentence.

-CITE-

12 USC Sec. 1766 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1766. Powers of Board

-STATUTE-

(a) The Board may prescribe rules and regulations for the

administration of this chapter (including, but not by way of

limitation, the merger, consolidation, and dissolution of

corporations organized under this chapter). Any central credit

union chartered by the Board shall be subject to such rules,

regulations, and orders as the Board deems appropriate and, except

as otherwise specifically provided in such rules, regulations, or

orders, shall be vested with or subject to the same rights,

privileges, duties, restrictions, penalties, liabilities,

conditions, and limitations that would apply to all Federal credit

unions under this chapter.

(b)(1) The Board may suspend or revoke the charter of any Federal

credit union, or place the same in involuntary liquidation and

appoint a liquidating agent therefor, upon its finding that the

organization is bankrupt or insolvent, or has violated any of the

provisions of its charter, its bylaws, this chapter, or any

regulations issued thereunder.

(2) The Board, through such persons as it shall designate, may

examine any Federal credit union in voluntary liquidation and, upon

its finding that such voluntary liquidation is not being conducted

in an orderly or efficient manner or in the best interests of its

members, may terminate such voluntary liquidation and place such

organization in involuntary liquidation and appoint a liquidating

agent therefor.

(3) Such liquidating agent shall have power and authority,

subject to the control and supervision of the Board and under such

rules and regulations as the Board may prescribe, (A) to receive

and take possession of the books, records, assets, and property of

every description of the Federal credit union in liquidation, to

sell, enforce collection of, and liquidate all such assets and

property, to compound all bad or doubtful debts, and to sue in his

own name or in the name of the Federal credit union in liquidation,

and defend such actions as may be brought against him as

liquidating agent or against the Federal credit union; (B) to

receive, examine, and pass upon all claims against the Federal

credit union in liquidation, including claims of members on member

accounts; (C) to make distribution and payment to creditors and

members as their interests may appear; and (D) to execute such

documents and papers and to do such other acts and things which he

may deem necessary or desirable to discharge his duties hereunder.

(4) Subject to the control and supervision of the Board and under

such rules and regulations as the Board may prescribe, the

liquidating agent of a Federal credit union in involuntary

liquidation shall (A) cause notice to be given to creditors and

members to present their claims and make legal proof thereof, which

notice shall be published once a week in each of three successive

weeks in a newspaper of general circulation in each county in which

the Federal credit union in liquidation maintained an office or

branch for the transaction of business on the date it ceased

unrestricted operations; except that whenever the aggregate book

value of the assets and property of a Federal credit union in

involuntary liquidation is less than $1,000, unless the Board shall

find that its books and records do not contain a true and accurate

record of its liabilities he shall declare such Federal credit

union in liquidation to be a ''no publication'' liquidation, and

publication of notice to creditors and members shall not be

required in such case; (B) from time to time make a ratable

dividend on all such claims as may have been proved to his

satisfaction or adjudicated in a court of competent jurisdiction

and, after the assets of such organization have been liquidated,

make further dividends on all claims previously proved or

adjudicated, and he may accept in lieu of a formal proof of claim

on behalf of any creditor or member the statement of any amount due

to such creditor or member as shown on the books and records of the

credit union; but all claims not filed before payment of the final

dividend shall be barred and claims rejected or disallowed by the

liquidating agent shall be likewise barred unless suit be

instituted thereon within three months after notice of rejection or

disallowance; and (C) in a ''no publication'' liquidation,

determine from all sources available to him, and within the limits

of available funds of the Federal credit union, the amounts due to

creditors and members, and after sixty days shall have elapsed from

the date of his appointment distribute the funds of the Federal

credit union to creditors and members ratably and as their

interests may appear.

(5) Upon certification by the liquidating agent in the case of an

involuntary liquidation, and upon such proof as shall be

satisfactory to the Board in the case of a voluntary liquidation,

that distribution has been made and that liquidation has been

completed, as provided herein, the Board shall cancel the charter

of such Federal credit union; but the corporate existence of the

Federal credit union shall continue for a period of three years

from the date of such cancellation of its charter, during which

period the liquidating agent, or his duly appointed successor, or

such persons as the Board shall designate, may act on behalf of the

Federal credit union for the purpose of paying, satisfying, and

discharging any existing liabilities or obligations, collecting and

distributing its assets, and doing all other acts required to

adjust and wind up its business and affairs, and it may sue and be

sued in its corporate name.

(c) After the expiration of five years from the date of

cancellation of the charter of a Federal credit union the Board

may, in its discretion, destroy any or all books and records of

such Federal credit union in its possession or under its control.

(d) The Board is authorized and empowered to execute any and all

functions and perform any and all duties vested in it hereby,

through such persons as it shall designate or employ; and it may

delegate to any person or persons, including any institution

operating under the general supervision of the Administration, the

performance and discharge of any authority, power, or function

vested in it by this chapter.

(e) All books and records of Federal credit unions shall be kept

and reports shall be made in accordance with forms approved by the

Board.

(f)(1) The Board is authorized to make investigations and to

conduct researches and studies of the problems of persons of small

means in obtaining credit at reasonable rates of interest, and of

the methods and benefits of cooperative saving and lending among

such persons. It is further authorized to make reports of such

investigations and to publish and disseminate the same.

(2)(A) The Board is authorized to conduct directly, or to make

grants to or contracts with colleges or universities, State or

local educational agencies, or other appropriate public or private

nonprofit organizations to conduct, programs for the training of

persons engaged, or preparing to engage, in the operation of credit

unions and in related consumer counseling programs, serving the

poor. It is authorized to establish a program of experimental,

developmental, demonstration, and pilot projects, either directly

or by grants to public or private nonprofit organizations,

including credit unions, or by contracts with such organizations or

other private organizations, designed to promote more effective

operation of credit unions, and related consumer counseling

programs, serving the poor.

(B) In carrying out its authority under this paragraph, the Board

shall consult with officials of the Office of Economic Opportunity

and other appropriate Federal agencies responsible for the

administration of projects or programs concerned with problems of

the poor. The development and operation of programs and projects

under this paragraph shall involve maximum feasible participation

of residents of the areas and members of the groups served by such

programs and projects, with community action agencies established

under the provisions of the Economic Opportunity Act of 1964 (42

U.S.C. 2701 et seq.) serving, to the extent feasible, as the means

through which such participation is achieved.

(C) In order to carry out the purposes of this paragraph, there

is authorized to be appropriated, as a supplement to any funds that

may be expended by the Board pursuant to sections 1755 and 1756 of

this title for such purposes, not to exceed $300,000 for the fiscal

year ending June 30, 1970, and not to exceed $1,000,000 for the

fiscal year ending June 30, 1971.

(g) Any officer or employee of the Administration is authorized,

when designated for the purpose by the Board, to administer oaths

and affirmations and to take affidavits and depositions touching

upon any matter within the jurisdiction of the Administration.

(h) The Board is authorized, empowered, and directed to require

that every person appointed or elected by any Federal credit union

to any position requiring the receipt, payment, or custody of money

or other personal property owned by a Federal credit union, or in

its custody or control as collateral or otherwise, give bond in a

corporate surety company holding a certificate of authority from

the Secretary of the Treasury under sections 9304-9308 of title 31,

as an acceptable surety on Federal bonds. Any such bond or bonds

shall be in a form approved by the Board with a view to providing

surety coverage to the Federal credit union with reference to loss

by reason of acts of fraud or dishonesty including forgery, theft,

embezzlement, wrongful abstraction, or misapplication on the part

of the person, directly or through connivance with others, and such

other surety coverages as the Board may determine to be reasonably

appropriate or as elsewhere required by this chapter. Any such

bond or bonds shall be in such an amount in relation to the money

or other personal property involved or in relation to the assets of

the Federal credit union as the Board may from time to time

prescribe by regulation for the purpose of requiring reasonable

coverage. In lieu of individual bonds the Board may approve the

use of a form of schedule or blanket bond which covers all of the

officers and employees of a Federal credit union whose duties

include the receipt, payment, or custody of money or other personal

property for or on behalf of the Federal credit union. The Board

may also approve the use of a form of excess coverage bond whereby

a Federal credit union may obtain an amount of coverage in excess

of the basic surety coverage.

(i) In addition to the authority conferred upon it by other

sections of this chapter, the Board is authorized in carrying out

its functions under this chapter -

(1) to appoint such personnel as may be necessary to enable the

Administration to carry out its functions;

(2) to expend such funds, enter into such contracts with public

and private organizations and persons, make such payments in

advance or by way of reimbursement, acquire and dispose of, by

lease or purchase, real or personal property, without regard to

the provisions of any other law applicable to executive or

independent agencies of the United States, and perform such other

functions or acts as it may deem necessary or appropriate to

carry out the provisions of this chapter, in accordance with the

rules and regulations or policies established by the Board not

inconsistent with this chapter; and

(3) to pay stipends, including allowances for travel to and

from the place of residence, to any individual to study in a

program assisted under this chapter upon a determination by the

Board that assistance to such individual in such studies will be

in furtherance of the purposes of this chapter.

(j) Staff. -

(1) Appointment and compensation. - The Board shall fix the

compensation and number of, and appoint and direct, employees of

the Board. Rates of basic pay for employees of the Board may be

set and adjusted by the Board without regard to the provisions of

chapter 51 or subchapter III of chapter 53 of title 5.

(2) Additional compensation and benefits. - The Board may

provide additional compensation and benefits to employees of the

Board if the same type of compensation or benefits are then being

provided by any other Federal bank regulatory agency or, if not

then being provided, could be provided by such an agency under

applicable provisions of law, rule, or regulation. In setting

and adjusting the total amount of compensation and benefits for

employees of the Board, the Board shall seek to maintain

comparability with other Federal bank regulatory agencies.

(3) Funding. - The salaries and expenses of the Board and

employees of the Board shall be paid from fees and assessments

(including income earned on insurance deposits) levied on insured

credit unions under this chapter.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 120, formerly Sec. 16, 48

Stat. 1221; Dec. 6, 1937, ch. 3, Sec. 3, 51 Stat. 4; July 31, 1946,

ch. 711, Sec. 8, 60 Stat. 745; 1947 Reorg. Plan No. 1, Sec. 401,

eff. July 1, 1947, 12 F.R. 4534, 61 Stat. 952; June 29, 1948, ch.

711, Sec. 1, 2, 62 Stat. 1091; June 30, 1954, ch. 426, Sec. 2, 68

Stat. 336; Aug. 24, 1954, ch. 905, Sec. 3, 68 Stat. 792; renumbered

Sec. 21 and amended Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73

Stat. 635; Pub. L. 90-375, Sec. 2(a), July 5, 1968, 82 Stat. 285;

Pub. L. 91-206, Sec. 2(1), (3), 4, Mar. 10, 1970, 84 Stat. 49, 50;

renumbered title I, Sec. 120, Pub. L. 91-468, Sec. 1(2), Oct. 19,

1970, 84 Stat. 994; amended Pub. L. 95-22, title III, Sec. 306,

Apr. 19, 1977, 91 Stat. 52; Pub. L. 95-630, title V, Sec. 502(b),

Nov. 10, 1978, 92 Stat. 3681; Pub. L. 97-320, title V, Sec. 526,

Oct. 15, 1982, 96 Stat. 1535; Pub. L. 100-86, title VII, Sec. 707,

Aug. 10, 1987, 101 Stat. 653; Pub. L. 101-73, title XII, Sec. 1203,

Aug. 9, 1989, 103 Stat. 520; Pub. L. 101-144, title III, Nov. 9,

1989, 103 Stat. 864; Pub. L. 103-325, title I, Sec. 120(a), Sept.

23, 1994, 108 Stat. 2188.)

-REFTEXT-

REFERENCES IN TEXT

The Economic Opportunity Act of 1964, referred to in subsec.

(f)(2)(B), is Pub. L. 88-452, Aug. 20, 1964, 78 Stat. 508, as

amended, which was classified generally to chapter 34 (Sec. 2701 et

seq.) of Title 42, The Public Health and Welfare, prior to repeal,

except for titles VIII and X, by Pub. L. 97-35, title VI, Sec.

683(a), Aug. 13, 1981, 95 Stat. 519. Titles VIII and X of the Act

are classified generally to subchapters VIII (Sec. 2991 et seq.)

and X (Sec. 2996 et seq.) of chapter 34 of Title 42. For complete

classification of this Act to the Code, see Tables.

-COD-

CODIFICATION

In subsec. (h), ''sections 9304-9308 of title 31'' substituted

for ''the Act approved July 30, 1947 (6 U.S.C., secs. 6-13)'' on

authority of Pub. L. 97-258, Sec. 4(b), Sept. 13, 1982, 96 Stat.

1067, the first section of which enacted Title 31, Money and

Finance.

-MISC3-

AMENDMENTS

1994 - Subsec. (k). Pub. L. 103-325 struck out subsec. (k) which

read as follows: ''Notwithstanding any other provision of law, the

Board may exercise the authority granted it by the Community

Development Credit Union Revolving Loan Fund Transfer Act (Public

Law 99-609, sec. 1, Nov. 6, 1986, 100 Stat. 3475) subject only to

the rules and regulations prescribed by the Board.''

1989 - Subsec. (j). Pub. L. 101-73 added subsec. (j).

Subsec. (k). Pub. L. 101-144 added subsec. (k).

1987 - Subsec. (i)(2). Pub. L. 100-86 inserted ''acquire and

dispose of, by lease or purchase, real or personal property,

without regard to the provisions of any other law applicable to

executive or independent agencies of the United States,'' after

''reimbursement,'' and '', in accordance with the rules and

regulations or policies established by the Board not inconsistent

with this chapter'' after ''this chapter''.

1982 - Subsec. (a). Pub. L. 97-320 inserted provisions relating

to the special authority of the Board over a central credit union,

and such a union's general prerogatives and liabilities.

1978 - Pub. L. 95-630 substituted ''Board'' for ''Administrator''

wherever appearing; and ''it'', ''them'', and ''its'' for ''he'',

''him'', and ''his'', respectively, where appropriate.

1977 - Subsec. (b)(3)(B). Pub. L. 95-22 substituted ''member

accounts'' for ''shares''.

1970 - Subsecs. (a) to (h). Pub. L. 91-206, Sec. 2(1), (3),

substituted ''Administrator'' for ''Director'' and

''Administration'' for ''Bureau'' wherever appearing.

Subsec. (i). Pub. L. 91-206, Sec. 4, added subsec. (i).

1968 - Subsec. (f). Pub. L. 90-375 redesignated existing

provisions as par. (1) and added par. (2).

1959 - Pub. L. 86-354 made capitalization, punctuation and

phraseological changes throughout text; redesignated, in subsec.

(b)(3), cls. (i) to (iv) as (A) to (D) and corrected in cl. (A) the

final ''cerdit'' to read ''credit''; redesignated, in subsec.

(b)(4), cls. (i) to (iii) as cls. (A) to (C); and redesignated the

second subsec. (b) and subsecs. (c) to (g) as (c) to (h),

respectively.

1954 - Subsec. (f). Act June 30, 1954, added subsec. (f).

Subsec. (g). Act Aug. 24, 1954, added subsec. (g).

1946 - Subsec. (b). Act July 31, 1946, provided a more adequate

statutory procedure for the administration of this chapter by

expressly authorizing the liquidation of a Federal credit union and

setting up a procedure which will achieve more orderly and complete

liquidation.

1937 - Subsec. (e). Act Dec. 6, 1937, added subsec. (e).

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

EFFECTIVE DATE OF 1968 AMENDMENT

Section 2(b) of Pub. L. 90-375 provided that: ''The amendments

made by subsection (a) (amending this section) shall become

effective July 1, 1968.''

-TRANS-

TRANSFER OF FUNCTIONS

Transfer of functions of Farm Credit Administration and Governor

thereof, generally, see notes set out under section 1751 of this

title.

Functions of Governor of Farm Credit Administration under this

section transferred to Federal Deposit Insurance Corporation by

Reorg. Plan No. 1 of 1947.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1772a of this title; title

5 section 5373; title 15 section 57a.

-CITE-

12 USC Sec. 1767 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1767. Fiscal agents and depositories; authorization to secure

deposits by governmental bodies

-STATUTE-

(a) Each Federal credit union organized under this chapter, when

requested by the Secretary of the Treasury, shall act as fiscal

agent of the United States and shall perform such services as the

Secretary of the Treasury may require in connection with the

collection of taxes and other obligations due the United States and

the lending, borrowing, and repayment of money by the United

States, including the issue, sale, redemption, or repurchase of

bonds, notes, Treasury certificates of indebtedness, or other

obligations of the United States; and to facilitate such purposes

the Board shall furnish to the Secretary of the Treasury from time

to time the names and addresses of all Federal credit unions with

such other available information concerning them as may be

requested by the Secretary of the Treasury. Any Federal credit

union organized under this chapter, when designated for that

purpose by the Secretary of the Treasury, shall be a depository of

public money, except receipts from customs, under such regulations

as may be prescribed by the Secretary of the Treasury.

(b) Any Federal credit union, upon the deposit with it of any

funds by the Federal Government, an Indian tribe, or any State or

local government or political subdivision thereof as otherwise

authorized by this chapter, is authorized to pledge any of its

assets securing the payment of the funds so deposited.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 121, formerly Sec. 17, 48

Stat. 1222; 1947, Reorg. Plan No. 1, Sec. 401, eff. July 1, 1947,

12 F.R. 4534, 61 Stat. 952; June 29, 1948, ch. 711, Sec. 1, 2, 62

Stat. 1091; renumbered Sec. 22, Pub. L. 86-354, Sec. 1, Sept. 22,

1959, 73 Stat. 637; amended Pub. L. 91-206, Sec. 2(1), Mar. 10,

1970, 84 Stat. 49; renumbered title I, Sec. 121, Pub. L. 91-468,

Sec. 1(2), Oct. 19, 1970, 84 Stat. 994; amended Pub. L. 95-630,

title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681; Pub. L. 100-86,

title VII, Sec. 716, Aug. 10, 1987, 101 Stat. 656.)

-MISC1-

AMENDMENTS

1987 - Pub. L. 100-86 designated existing provisions as subsec.

(a) and added subsec. (b).

1978 - Pub. L. 95-630 substituted ''Board'' for

''Administrator''.

1970 - Pub. L. 91-206 substituted ''Administrator'' for

''Director''.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-TRANS-

TRANSFER OF FUNCTIONS

Transfer of functions of Farm Credit Administration and Governor

thereof, generally, see notes set out under section 1751 of this

title.

Functions of Governor of Farm Credit Administration under this

section transferred to Federal Deposit Insurance Corporation by

Reorg. Plan No. 1 of 1947.

-CITE-

12 USC Sec. 1768 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1768. Taxation

-STATUTE-

The Federal credit unions organized hereunder, their property,

their franchises, capital, reserves, surpluses, and other funds,

and their income shall be exempt from all taxation now or hereafter

imposed by the United States or by any State, Territorial, or local

taxing authority; except that any real property and any tangible

personal property of such Federal credit unions shall be subject to

Federal, State, Territorial, and local taxation to the same extent

as other similar property is taxed. Nothing herein contained shall

prevent holdings in any Federal credit union organized hereunder

from being included in the valuation of the personal property of

the owners or holders thereof in assessing taxes imposed by

authority of the State or political subdivision thereof in which

the Federal credit union is located; but the duty or burden of

collecting or enforcing the payment of such a tax shall not be

imposed upon any such Federal credit union and the tax shall not

exceed the rate of taxes imposed upon holdings in domestic credit

unions.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 122, formerly Sec. 18, 48

Stat. 1222; Dec. 6, 1937, ch. 3, Sec. 4, 51 Stat. 4; renumbered

Sec. 23 and amended Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73

Stat. 637; renumbered title I, Sec. 122, Pub. L. 91-468, Sec. 1(2),

Oct. 19, 1970, 84 Stat. 994.)

-MISC1-

AMENDMENTS

1959 - Pub. L. 86-354 substituted ''but'' for ''Provided,

however, That'' and inserted ''a'' before ''tax''.

1937 - Act Dec. 6, 1937, inserted tax exemption provision, the

real and tangible personal property proviso, provided that

responsibility of tax collection would not be imposed upon Federal

credit unions, and that tax rate would not exceed that of domestic

credit unions.

-CITE-

12 USC Sec. 1769 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1769. Separability; right to alter, amend, or repeal chapter

-STATUTE-

(a) If any provision of this chapter or the application thereof

to any person or circumstance, is held invalid, the remainder of

the chapter, and the application of such provision to other persons

or circumstances, shall not be affected thereby.

(b) The right to alter, amend, or repeal this chapter or any part

thereof, or any charter issued pursuant to the provisions of this

chapter, is expressly reserved.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 123, formerly Sec. 24, as

added Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat. 637;

renumbered title I, Sec. 123, Pub. L. 91-468, Sec. 1(2), Oct. 19,

1970, 84 Stat. 994.)

-MISC1-

PRIOR PROVISIONS

A prior section 1769, act June 26, 1934, ch. 750, Sec. 19, 48

Stat. 1222, made available not more than $50,000 of the funds

available to the Governor, under section 1404 of this title, for

administrative expenses in administering this chapter, prior to the

amendment of act June 26, 1934, by Pub. L. 86-354.

Provisions similar to those comprising this section were

contained in section 20 of act June 26, 1934, ch. 750, 48 Stat.

1222 (formerly classified to section 1770 of this title), prior to

the amendment and renumbering of act June 26, 1934, by Pub. L.

86-354.

-CITE-

12 USC Sec. 1770 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1770. Allotment of space in Federal buildings

-STATUTE-

Upon application by any credit union organized under State law or

by any Federal credit union organized in accordance with the terms

of this chapter, which application shall be addressed to the

officer or agency of the United States charged with the allotment

of space in the Federal buildings in the community or district in

which such credit union does business, such officer or agency may

in his or its discretion allot space to such credit union without

charge for rent or services if at least 95 percent of the

membership of the credit union to be served by the allotment of

space is composed of persons who either are presently Federal

employees or were Federal employees at the time of admission into

the credit union, and members of their families, and if space is

available. For the purpose of this section, the term ''services''

includes, but is not limited to, the providing of lighting,

heating, cooling, electricity, office furniture, office machines

and equipment, telephone service (including installation of lines

and equipment and other expenses associated with telephone

service), and security systems (including installation and other

expenses associated with security systems). Where there is an

agreement for the payment of costs associated with the provision of

space or services, nothing in title 31 or any other provision of

law, shall be construed to prohibit or restrict payment by

reimbursement to the miscellaneous receipts or other appropriate

account of the Treasury.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 124, formerly Sec. 25, as

added Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat. 638;

renumbered title I, Sec. 124, Pub. L. 91-468, Sec. 1(2), Oct. 19,

1970, 84 Stat. 994; amended Pub. L. 97-320, title V, Sec. 515, Oct.

15, 1982, 96 Stat. 1530; Pub. L. 97-457, Sec. 27, Jan. 12, 1983, 96

Stat. 2510; Pub. L. 103-160, div. B, title XXVIII, Sec. 2854, Nov.

30, 1993, 107 Stat. 1908; Pub. L. 103-337, div. A, title X, Sec.

1070(b)(12), Oct. 5, 1994, 108 Stat. 2857.)

-MISC1-

PRIOR PROVISIONS

A prior section 1770, act June 26, 1934, ch. 750, Sec. 20, 48

Stat. 1222, related to separability of provisions and right to

alter, amend, or repeal chapter, prior to the amendment of act June

26, 1934, by Pub. L. 86-354. See section 1769 of this title.

Provisions similar to those comprising this section were

contained in section 21 of act June 26, 1934, ch. 750, as added

July 9, 1937, ch. 471, 50 Stat. 487 (formerly classified to section

1771 of this title), prior to the amendment and renumbering of act

June 26, 1934, by Pub. L. 86-354.

AMENDMENTS

1994 - Pub. L. 103-337 made technical correction to Pub. L.

103-160, Sec. 2854(1). See 1993 Amendment note below.

1993 - Pub. L. 103-160, Sec. 2854(2), substituted ''allot space

to such credit union without charge for rent or services if at

least 95 percent of the membership of the credit union to be served

by the allotment of space is composed of persons who either are

presently Federal employees or were Federal employees at the time

of admission into the credit union, and members of their families,

and if space is available.'' for ''allot space to such credit union

if space is available without charge for rent or services.''

Pub. L. 103-160, Sec. 2854(1), as amended by Pub. L. 103-337,

struck out ''at least 95 per centum of the membership of which is

composed of persons who either are presently Federal employees or

were Federal employees at the time of admission into the credit

union, and members of their families,'' after ''terms of this

chapter''.

1983 - Pub. L. 97-457 inserted ''of'' after ''including

installation''.

1982 - Pub. L. 97-320 inserted definition of ''services'', and

provided that where there is an agreement for the payment of costs

associated with the provision of space or services, nothing in

title 31 or any other provision of law shall be construed to

prohibit or restrict payment by reimbursement to the miscellaneous

receipts or other appropriate account of the Treasury.

EFFECTIVE DATE OF 1994 AMENDMENT

Section 1070(b) of Pub. L. 103-337 provided that the amendment

made by that section is effective as of Nov. 30, 1993, and as if

included in the National Defense Authorization Act for Fiscal Year

1994, Pub. L. 103-160, as enacted.

-CITE-

12 USC Sec. 1771 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1771. Conversion from Federal to State credit union and from

State to Federal credit union

-STATUTE-

(a) A Federal credit union may be converted into a State credit

union under the laws of any State, the District of Columbia, the

several Territories and possessions of the United States, the

Panama Canal Zone, or the Commonwealth of Puerto Rico, by complying

with the following requirements:

(1) The proposition for such conversion shall first be

approved, and a date set for a vote thereon by the members

(either at a meeting to be held on such date or by written ballot

to be filed on or before such date), by a majority of the

directors of the Federal credit union. Written notice of the

proposition and of the date set for the vote shall then be

delivered in person to each member, or mailed to each member at

the address for such member appearing on the records of the

credit union, not more than thirty nor less than seven days prior

to such date. Approval of the proposition for conversion shall

be by the affirmative vote of a majority of the members of the

credit union who vote on the proposal. The written notice of the

proposition shall in boldface type state that the issue will be

decided by a majority of the members who vote.

(2) A statement of the results of the vote, verified by the

affidavits of the president or vice president and the secretary,

shall be filed with the Administration within ten days after the

vote is taken.

(3) Promptly after the vote is taken and in no event later than

ninety days thereafter, if the proposition for conversion was

approved by such vote, the credit union shall take such action as

may be necessary under the applicable State law to make it a

State credit union, and within ten days after receipt of the

State credit union charter there shall be filed with the

Administration a copy of the charter thus issued. Upon such

filing the credit union shall cease to be a Federal credit union.

(4) Upon ceasing to be a Federal credit union, such credit

union shall no longer be subject to any of the provisions of this

chapter. The successor State credit union shall be vested with

all of the assets and shall continue responsible for all of the

obligations of the Federal credit union to the same extent as

though the conversion had not taken place.

(b)(1) A State credit union, organized under the laws of any

State, the District of Columbia, the several Territories and

possessions of the United States, the Panama Canal Zone, or the

Commonwealth of Puerto Rico, may be converted into a Federal credit

union by (A) complying with all State requirements requisite to

enabling it to convert to a Federal credit union or to cease being

a State credit union, (B) filing with the Administration proof of

such compliance, satisfactory to the Board, and (C) filing with the

Administration and organization certificate as required by this

chapter.

(2) When the Board has been satisfied that all of such

requirements, and all other requirements of this chapter, have been

complied with, the Board shall approve the organization

certificate. Upon such approval, the State credit union shall

become a Federal credit union as of the date it ceases to be a

State credit union. The Federal credit union shall be vested with

all of the assets and shall continue responsible for all of the

obligations of the State credit union to the same extent as though

the conversion had not taken place.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 125, formerly Sec. 26, as

added Pub. L. 86-354, Sec. 1, Sept. 22, 1959, 73 Stat. 638; amended

Pub. L. 91-206, Sec. 2(1), (3), Mar. 10, 1970, 84 Stat. 49;

renumbered title I, Sec. 125, Pub. L. 91-468, Sec. 1(2), Oct. 19,

1970, 84 Stat. 994; amended Pub. L. 95-630, title V, Sec. 502(b),

Nov. 10, 1978, 92 Stat. 3681; Pub. L. 97-320, title V, Sec. 527,

Oct. 15, 1982, 96 Stat. 1535.)

-REFTEXT-

REFERENCES IN TEXT

For definition of Canal Zone, referred to in text, see section

3602(b) of Title 22, Foreign Relations and Intercourse.

-MISC2-

PRIOR PROVISIONS

A prior section 1771, act June 26, 1934, ch. 750, Sec. 21, as

added July 9, 1937, ch. 471, 50 Stat. 487, related to allotment of

space in Federal buildings, prior to the amendment of act June 26,

1934, by Pub. L. 86-354. See section 1770 of this title.

AMENDMENTS

1982 - Subsec. (a)(1). Pub. L. 97-320 substituted ''of the credit

union who vote on the proposal'' for '', in person or in writing'',

and inserted provision that the written notice of the proposition

shall in boldface type state that the issue will be decided by a

majority of the members who vote.

1978 - Subsec. (b). Pub. L. 95-630 substituted ''Board'' for

''Administrator'' in two places.

1970 - Pub. L. 91-206 substituted ''Administration'' for

''Bureau'' and ''Administrator'' for ''Director'' wherever

appearing.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-CITE-

12 USC Sec. 1772 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1772. Territorial application of chapter

-STATUTE-

The provisions of this chapter shall apply to the several States,

the District of Columbia, the several Territories, including the

trust territories, and possessions of the United States, the Panama

Canal Zone, and the Commonwealth of Puerto Rico.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 126, formerly Sec. 22, as

added July 31, 1946, ch. 711, Sec. 7, 60 Stat. 745; amended May 8,

1952, ch. 245, 66 Stat. 66, renumbered Sec. 27 and amended Pub. L.

86-354, Sec. 1, Sept. 22, 1959, 73 Stat. 638; renumbered title I,

Sec. 126, Pub. L. 91-468, Sec. 1(2), Oct. 19, 1970, 84 Stat. 994;

amended Pub. L. 93-383, title VII, Sec. 726, Aug. 22, 1974, 88

Stat. 720.)

-REFTEXT-

REFERENCES IN TEXT

For definition of Canal Zone, referred to in text, see section

3602(b) of Title 22, Foreign Relations and Intercourse.

-MISC2-

AMENDMENTS

1974 - Pub. L. 93-383 inserted reference to trust territories.

1959 - Pub. L. 86-354 provided for application of chapter to the

States, the District of Columbia, the Territories and possessions

of the United States and Puerto Rico and struck out specific

reference to the Virgin Islands.

1952 - Act May 8, 1952, amended section to extend provisions of

this chapter to the Virgin Islands.

-CITE-

12 USC Sec. 1772a 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1772a. Gifts; acceptance of conditional gifts; deposit

-STATUTE-

The Board is authorized to accept gifts of money made

unconditionally by will or otherwise for the carrying out of any of

the functions under this chapter. A conditional gift of money made

by will or otherwise for such purposes may be accepted and used in

accordance with its conditions, but no such gift shall be accepted

which is conditioned upon any expenditure not to be met therefrom

or from income thereof unless the Board determines that

supplementation of such gift from the fees it may expend pursuant

to sections 1755 and 1756 of this title or from any funds

appropriated pursuant to section 1766(f)(2)(C) of this title for

the purpose of making such expenditure will not adversely affect

the sound administration of this chapter. Any such gift shall be

deposited in the Treasury of the United States for the account of

the Administration and may be expended in accordance with section

1755 of this title or as provided in the preceding sentence.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 127, formerly Sec. 28, as

added Pub. L. 90-375, Sec. 3, July 5, 1968, 82 Stat. 285; amended

Pub. L. 91-206, Sec. 2(1), (3), Mar. 10, 1970, 84 Stat. 49;

renumbered title I, Sec. 127, Pub. L. 91-468, Sec. 1(2), Oct. 19,

1970, 84 Stat. 994; amended Pub. L. 95-630, title V, Sec. 502(b),

Nov. 10, 1978, 92 Stat. 3681.)

-MISC1-

AMENDMENTS

1978 - Pub. L. 95-630 substituted ''Board'' for ''Administrator''

in two places, and ''it may expend'' for ''he may expend''.

1970 - Pub. L. 91-206 substituted ''Administrator'' for

''Director'' and ''Administration'' for ''Bureau'' wherever

appearing.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-CITE-

12 USC Sec. 1772b 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1772b. Apportionment

-STATUTE-

Notwithstanding any other provision of law, funds received by the

Board pursuant to any method provided by this chapter, and

interest, dividend, or other income thereon, shall not be subject

to apportionment for the purpose of chapter 15 of title 31 or under

any other authority.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 128, as added Pub. L.

100-86, title V, Sec. 505(e), Aug. 10, 1987, 101 Stat. 633.)

-CITE-

12 USC Sec. 1772c 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1772c. Trust fund

-STATUTE-

Notwithstanding any other provision of law, all moneys of the

Board shall be treated as trust funds for the purpose of section

906(a)(2) (FOOTNOTE 1) of title 2. This section is effective for

fiscal year 1986 and every fiscal year thereafter.

(FOOTNOTE 1) See References in Text note below.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 129, as added Pub. L.

100-86, title VII, Sec. 708, Aug. 10, 1987, 101 Stat. 653.)

-REFTEXT-

REFERENCES IN TEXT

Section 906(a) of title 2, referred to in text, was amended

generally by Pub. L. 101-508, title XIII, Sec. 13101(d)(1), Nov. 5,

1990, 104 Stat. 1388-589. Provisions similar to those formerly

appearing in section 906(a)(2) are now contained in section

906(k)(6) of Title 2, The Congress.

-CITE-

12 USC Sec. 1772c-1 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1772c-1. Community development revolving loan fund for credit

unions

-STATUTE-

(a) In general

The Board may exercise the authority granted to it by the

Community Development Credit Union Revolving Loan Fund Transfer

Act, including any additional appropriation made or earnings

accrued, subject only to this section and to regulations prescribed

by the Board.

(b) Investment

The Board may invest any idle Fund moneys in United States

Treasury securities. Any interest accrued on such securities shall

become a part of the Fund.

(c) Loans

The Board may require that any loans made from the Fund be

matched by increased shares in the borrower credit union.

(d) Interest

Interest earned by the Fund may be allocated by the Board for

technical assistance to community development credit unions,

subject to an appropriations Act.

(e) ''Fund'' defined

As used in this section, the term ''Fund'' means the Community

Development Credit Union Revolving Loan Fund.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 130, as added Pub. L.

103-325, title I, Sec. 120(b), Sept. 23, 1994, 108 Stat. 2188.)

-REFTEXT-

REFERENCES IN TEXT

The Community Development Credit Union Revolving Loan Fund

Transfer Act, referred to in subsec. (a), is Pub. L. 99-609, Nov.

6, 1986, 100 Stat. 3475, which is set out as a note under section

9822 of Title 42, The Public Health and Welfare.

-CITE-

12 USC Sec. 1772d 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1772d. Forfeiture of organization certificate for money

laundering or cash transaction reporting offenses

-STATUTE-

(a) Forfeiture of franchise for money laundering or cash

transaction reporting offenses

(1) Conviction of title 18 offenses

(A) Duty to notify

If a credit union has been convicted of any criminal offense

under section 1956 or 1957 of title 18, the Attorney General

shall provide to the Board a written notification of the

conviction and shall include a certified copy of the order of

conviction from the court rendering the decision.

(B) Notice of termination; pretermination hearing

After receiving written notification from the Attorney

General of such a conviction, the Board shall issue to such

credit union a notice of its intention to terminate all rights,

privileges, and franchises of the credit union and schedule a

pretermination hearing.

(2) Conviction of title 31 offenses

If a credit union is convicted of any criminal offense under

section 5322 or 5324 of title 31 after receiving written

notification from the Attorney General, the Board may issue to

such credit union a notice of its intention to terminate all

rights, privileges, and franchises of the credit union and

schedule a pretermination hearing.

(3) Judicial review

Section 1786(j) of this title shall apply to any proceeding

under this section.

(b) Factors to be considered

In determining whether a franchise shall be forfeited under

subsection (a) of this section, the Board shall take into account

the following factors:

(1) The extent to which directors, committee members, or senior

executive officers (as defined by the Board in regulations which

the Board shall prescribe) of the credit union knew of, or were

involved in, the commission of the money laundering offense of

which the credit union was found guilty.

(2) The extent to which the offense occurred despite the

existence of policies and procedures within the credit union

which were designed to prevent the occurrence of any such

offense.

(3) The extent to which the credit union has fully cooperated

with law enforcement authorities with respect to the

investigation of the money laundering offense of which the credit

union was found guilty.

(4) The extent to which the credit union has implemented

additional internal controls (since the commission of the offense

of which the credit union was found guilty) to prevent the

occurrence of any other money laundering offense.

(5) The extent to which the interest of the local community in

having adequate deposit and credit services available would be

threatened by the forfeiture of the franchise.

(c) Successor liability

This section shall not apply to a successor to the interests of,

or a person who acquires, a credit union that violated a provision

of law described in subsection (a) of this section, if the

successor succeeds to the interests of the violator, or the

acquisition is made, in good faith and not for purposes of evading

this section or regulations prescribed under this section.

-SOURCE-

(June 26, 1934, ch. 750, title I, Sec. 131, as added Pub. L.

102-550, title XV, Sec. 1502(c), Oct. 28, 1992, 106 Stat. 4047;

amended Pub. L. 103-325, title IV, Sec. 411(c)(2)(B), Sept. 23,

1994, 108 Stat. 2253.)

-MISC1-

AMENDMENTS

1994 - Subsec. (a)(2). Pub. L. 103-325 substituted ''section 5322

or 5324 of title 31'' for ''section 5322 of title 31''.

-CITE-

12 USC Sec. 1773 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1773. District of Columbia credit unions; conversion to

Federal status

-STATUTE-

Any credit union organized under the District of Columbia Credit

Unions Act, as amended, may apply for conversion into a Federal

credit union by filing with the National Credit Union

Administration Board (in sections 1773 to 1775 of this title

referred to as the Board), pursuant to a resolution adopted by a

majority of its directors, an organization certificate meeting the

requirements of section 1753 of this title.

-SOURCE-

(Pub. L. 88-395, Sec. 1, Aug. 1, 1964, 78 Stat. 377; Pub. L.

91-206, Sec. 3, Mar. 10, 1970, 84 Stat. 49; Pub. L. 95-630, title

V, Sec. 501, Nov. 10, 1978, 92 Stat. 3680.)

-REFTEXT-

REFERENCES IN TEXT

The District of Columbia Credit Unions Act, referred to in text,

was repealed by Pub. L. 88-395, Sec. 4, Aug. 1, 1964, 78 Stat. 377.

-COD-

CODIFICATION

Section was not enacted as part of the Federal Credit Union Act

which comprises this chapter.

-TRANS-

TRANSFER OF FUNCTIONS

''National Credit Union Administration Board'' and ''Board''

substituted in text for ''Director of the Bureau of Federal Credit

Unions'' and ''Director'', respectively, pursuant to section 3 of

Pub. L. 91-206 and section 501 of Pub. L. 95-630 (12 U.S.C. 1752a)

which transferred functions of Bureau of Federal Credit Unions, and

Director thereof, to National Credit Union Administration and

vested authority for management of Administration in National

Credit Union Administration Board.

-MISC5-

REPEALS; REVOCATION OF ORGANIZATION CERTIFICATES ISSUED UNDER

DISTRICT OF COLUMBIA CREDIT UNIONS ACT

Section 4 of Pub. L. 88-395 provided that: ''Effective thirty

days after enactment of this Act (Aug. 1, 1964), the District of

Columbia Credit Unions Act (47 Stat. 326), as amended, is repealed

and all organization certificates issued thereunder and still in

force are revoked.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1775 of this title.

-CITE-

12 USC Sec. 1774 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1774. Approval of certificate; assets and obligations of

applicant credit union

-STATUTE-

The Board shall approve any such organization certificate meeting

such requirements. Upon such approval, the applicant credit union

shall become a Federal credit union, and shall be vested with all

of the assets and shall continue responsible for all of the

obligations of such applicant credit union to the same extent as

though the conversion had not taken place.

-SOURCE-

(Pub. L. 88-395, Sec. 2, Aug. 1, 1964, 78 Stat. 377; Pub. L.

91-206, Sec. 3, Mar. 10, 1970, 84 Stat. 49; Pub. L. 95-630, title

V, Sec. 501, Nov. 10, 1978, 92 Stat. 3680.)

-COD-

CODIFICATION

Section was not enacted as part of the Federal Credit Union Act

which comprises this chapter.

-TRANS-

TRANSFER OF FUNCTIONS

''Board'', meaning the National Credit Union Administration

Board, substituted in text for ''Director'', meaning Director of

Bureau of Federal Credit Unions, pursuant to section 3 of Pub. L.

91-206 and section 501 of Pub. L. 95-630 (12 U.S.C. 1752a) which

transferred functions of Bureau of Federal Credit Unions, and

Director thereof, to National Credit Union Administration and

vested authority for management of Administration in National

Credit Union Administration Board.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1773, 1775 of this title.

-CITE-

12 USC Sec. 1775 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-

Sec. 1775. Conditions upon conversion to Federal status

-STATUTE-

Any District of Columbia credit union converting into a Federal

credit union in accordance with sections 1773 to 1775 of this title

shall thereupon be subject to the limitations, vested with the

powers, and charged with the liabilities conferred and imposed by

this chapter upon credit unions organized thereunder, except that -

(1) no fee shall be imposed upon a credit union converting

pursuant to sections 1773 to 1775 of this title as an incident to

its conversion;

(2) any loan or investment made by a credit union converting

pursuant to sections 1773 to 1775 of this title in conformity

with the District of Columbia Credit Unions Act prior to its

conversion, which does not conform to the requirements of this

chapter and is still outstanding at the time of conversion, shall

be liquidated at or before its maturity or, if it has no maturity

date, in a prudent manner and within a reasonable period of time;

(3) a credit union converting pursuant to sections 1773 to 1775

of this title shall submit proposed bylaws to the Board for the

Board's approval after its conversion, but not later than thirty

days following its next annual meeting or six months after August

1, 1964, whichever is later: Provided, That any existing bylaw

inconsistent with any other requirements of this chapter shall be

deemed null and void.

-SOURCE-

(Pub. L. 88-395, Sec. 3, Aug. 1, 1964, 78 Stat. 377; Pub. L.

91-206, Sec. 3, Mar. 10, 1970, 84 Stat. 49; Pub. L. 95-630, title

V, Sec. 501, Nov. 10, 1978, 92 Stat. 3680.)

-REFTEXT-

REFERENCES IN TEXT

The District of Columbia Credit Unions Act, referred to in text,

was repealed by Pub. L. 88-395, Sec. 4, Aug. 1, 1964, 78 Stat. 377.

-COD-

CODIFICATION

Section was not enacted as part of the Federal Credit Union Act

which comprises this chapter.

-TRANS-

TRANSFER OF FUNCTIONS

''Board'' and ''the Board's'', meaning the National Credit Union

Administration Board, substituted in par. (3) for ''Director'' and

''his'', respectively, meaning Director of Bureau of Federal Credit

Unions, pursuant to section 3 of Pub. L. 91-206 and section 501 of

Pub. L. 95-630 (12 U.S.C. 1752a) which transferred functions of

Bureau of Federal Credit Unions, and Director thereof, to National

Credit Union Administration and vested authority for management of

Administration in National Credit Union Administration Board.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1773 of this title.

-CITE-

12 USC SUBCHAPTER II - SHARE INSURANCE 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER II - SHARE INSURANCE

.

-HEAD-

SUBCHAPTER II - SHARE INSURANCE

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in section 1795f of this title.

-CITE-

12 USC Sec. 1781 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER II - SHARE INSURANCE

-HEAD-

Sec. 1781. Insurance of member accounts

-STATUTE-

(a) Eligibility

The Board, as hereinafter provided, shall insure the member

accounts of all Federal credit unions and it may insure the member

accounts of (1) credit unions organized and operated according to

the laws of any State, the District of Columbia, the several

territories, including the trust territories, and possessions of

the United States, the Panama Canal Zone, or the Commonwealth of

Puerto Rico, and (2) credit unions organized and operating under

the jurisdiction of the Department of Defense if such credit unions

are operating in compliance with the requirements of subchapter I

of this chapter and regulations issued thereunder.

(b) Application; agreement

Application for insurance of member accounts shall be made

immediately by each Federal credit union and may be made at any

time by a State credit union or a credit union operating under the

jurisdiction of the Department of Defense. Applications for such

insurance shall be in such form as the Board shall provide and

shall contain an agreement by the applicant -

(1) to pay the reasonable cost of such examinations as the

Board may deem necessary in connection with determining the

eligibility of the applicant for insurance: Provided, That

examinations required under subchapter I of this chapter shall be

so conducted that the information derived therefrom may be

utilized for share insurance purposes, and examinations conducted

by State regulatory agencies shall be utilized by the Board for

such purposes to the maximum extent feasible;

(2) to permit and pay the reasonable cost of such examinations

as in the judgment of the Board may from time to time be

necessary for the protection of the fund and of other insured

credit unions;

(3) to permit the Board to have access to any information or

report with respect to any examination made by or for any public

regulatory authority, including any commission, board, or

authority having supervision of a State-chartered credit union,

and furnish such additional information with respect thereto as

the Board may require;

(4) to provide protection and indemnity against burglary,

defalcation, and other similar insurable losses, of the type, in

the form, and in an amount at least equal to that required by the

laws under which the credit union is organized and operates;

(5) to maintain such regular reserves as may be required by the

laws of the State, district, territory, or other jurisdiction

pursuant to which it is organized and operated, in the case of a

State-chartered credit union, or as may be required by section

1762 (FOOTNOTE 1) of this title, in the case of a Federal credit

union;

(FOOTNOTE 1) See References in Text note below.

(6) to maintain such special reserves as the Board, by

regulation or in special cases, may require for protecting the

interest of members or to assure that all insured credit unions

maintain regular reserves which are not less than those required

under subchapter I of this chapter;

(7) not to issue or have outstanding any account or security

the form of which, by regulation or in special cases, has not

been approved by the Board except for accounts authorized by

State law for State credit unions;

(8) to pay and maintain its deposit and to pay the premium

charges for insurance imposed by this subchapter; and

(9) to comply with the requirements of this subchapter and of

regulations prescribed by the Board pursuant thereto.

(c) Approval of application

(1) Before approving the application of any credit union for

insurance of its member accounts, the Board shall consider -

(A) the history, financial condition, and management policies

of the applicant;

(B) the economic advisability of insuring the applicant without

undue risk of the fund;

(C) the general character and fitness of the applicant's

management;

(D) the convenience and needs of the members to be served by

the applicant; and

(E) whether the applicant is a cooperative association

organized for the purpose of promoting thrift among its members

and creating a source of credit for provident or productive

purposes.

(2) The Board shall disapprove the application of any credit

union for insurance of its member accounts if it finds that its

reserves are inadequate, that its financial condition and policies

are unsafe or unsound, that its management is unfit, that insurance

of its member accounts would otherwise involve undue risk to the

fund, or that its powers and purposes are inconsistent with the

promotion of thrift among its members and the creation of a source

of credit for provident or productive purposes.

(3) Repealed. Pub. L. 95-22, title III, Sec. 301, Apr. 19, 1977,

91 Stat. 49.

(d) Certificate of insurance

Upon the approval of any application for insurance, the Board

shall notify the applicant and shall issue to it a certificate

evidencing the fact that it is, as of the date of issuance of the

certificate, an insured credit union under the provisions of this

subchapter.

(e) Prohibition on certain associations

(1) In general

No insured credit union may be sponsored by or accept financial

support, directly or indirectly, from any Government-sponsored

enterprise, if the credit union includes the customers of the

Government-sponsored enterprise in the field of membership of the

credit union.

(2) Routine business financing

Paragraph (1) shall not apply with respect to advances or other

forms of financial assistance generally provided by a

Government-sponsored enterprise in the ordinary course of

business of the enterprise.

(3) ''Government-sponsored enterprise'' defined

For purposes of this subsection, the term

''Government-sponsored enterprise'' has the meaning given to such

term in section 1404(e)(1)(A) of the Financial Institutions

Reform, Recovery, and Enforcement Act of 1989.

(4) Employee credit union

No provision of this subsection shall be construed as

prohibiting any employee of a Government-sponsored enterprise

from becoming a member of a credit union whose field of

membership is the employees of such enterprise.

-SOURCE-

(June 26, 1934, ch. 750, title II, Sec. 201, as added Pub. L.

91-468, Sec. 1(3), Oct. 19, 1970, 84 Stat. 994; amended Pub. L.

92-221, Sec. 1, 2, Dec. 23, 1971, 85 Stat. 796, 797; Pub. L. 95-22,

title III, Sec. 301, Apr. 19, 1977, 91 Stat. 49; Pub. L. 95-630,

title V, Sec. 502(b), 504, Nov. 10, 1978, 92 Stat. 3681, 3682; Pub.

L. 98-369, div. B, title VIII, Sec. 2801, July 18, 1984, 98 Stat.

1203; Pub. L. 104-208, div. A, title II, Sec. 2615(a), Sept. 30,

1996, 110 Stat. 3009-478.)

-REFTEXT-

REFERENCES IN TEXT

For definition of Canal Zone, referred to in text, see section

3602(b) of Title 22, Foreign Relations and Intercourse.

Section 1762 of this title, referred to in subsec. (b)(5), was

repealed by Pub. L. 105-219, title III, Sec. 301(g)(3), Aug. 7,

1998, 112 Stat. 931.

Section 1404(e)(1)(A) of the Financial Institutions Reform,

Recovery, and Enforcement Act of 1989, referred to in subsec.

(e)(3), is section 1404(e)(1)(A) of Pub. L. 101-73, which is set

out as a note under section 1811 of this title.

-MISC2-

AMENDMENTS

1996 - Subsec. (e). Pub. L. 104-208 added subsec. (e).

1984 - Subsec. (b)(8). Pub. L. 98-369 inserted provisions

relating to payment and maintenance of the deposit.

1978 - Subsec. (a). Pub. L. 95-630, Sec. 502(b), 504(a),

substituted ''Board'' for ''Administrator'' and ''it'' for ''he'',

and inserted '', including the trust territories,'' after ''the

several territories''.

Subsec. (b). Pub. L. 95-630, Sec. 502(b), 504(b), substituted

''Board'' for ''Administrator'' wherever appearing and inserted in

par. (7) ''except for accounts authorized by State law for State

credit unions'' after ''by the Board''.

Subsec. (c). Pub. L. 95-630, Sec. 502(b), substituted ''Board''

for ''Administrator'' wherever appearing, and in par. (2)

substituted ''it'' for ''he'' before ''finds''.

Subsecs. (d), (e). Pub. L. 95-630, Sec. 502(b), 504(c), struck

out subsec. (d), redesignated subsec. (e) as (d) and substituted

''Board'' for ''Administrator''.

1977 - Subsec. (c)(3) Pub. L. 95-22 struck out par. (3) which

provided for approval by Administrator of applications of State

credit unions for insurance of its member accounts where credit

union meets requirements of this chapter and where in the event of

liquidation of the credit union, the claims with respect to demand

deposit accounts shall be subordinate to the claims with respect to

member accounts.

1971 - Subsec. (c)(2). Pub. L. 92-221, Sec. 1(a), substituted

''disapproved'' for ''reject''.

Subsec. (c)(3). Pub. L. 92-221, Sec. 2, added par. (3).

Subsec. (d). Pub. L. 92-221, Sec. 1(b), substituted provisions

allowing, in certain cases, a two-year period to meet the

requirements for insurance following the disapproval of an

application for insurance by a Federal credit union, for provisions

mandating the suspension or revocation of the charter of a Federal

credit union unless the credit union met the requirements for

insurance and became an insured credit union within one year of the

rejection of its application for insurance.

EFFECTIVE DATE OF 1996 AMENDMENT

Section 2615(c) of div. A of Pub. L. 104-208 provided that:

''The amendments made by this section (amending this section and

section 1828 of this title) shall apply on and after January 1,

1996.''

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 461, 1782 of this title.

-CITE-

12 USC Sec. 1782 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER II - SHARE INSURANCE

-HEAD-

Sec. 1782. Administration of insurance fund

-STATUTE-

(a) Reports of condition

(1) Each insured credit union shall make reports of condition to

the Board upon dates which shall be selected by it. Such reports

of condition shall be in such form and shall contain such

information as the Board may require. The reporting dates selected

for reports of condition shall be the same for all insured credit

unions except that when any of said reporting dates is a

nonbusiness day for any credit union the preceding business day

shall be its reporting date. The total amount of the member

accounts of each insured credit union as of each reporting date

shall be reported in such reports of condition in accordance with

regulations prescribed by the Board. Each report of condition shall

contain a declaration by the president, by a vice president, by the

treasurer, or by any other officer designated by the board of

directors of the reporting credit union to make such declaration,

that the report is true and correct to the best of such officer's

knowledge and belief. Unless such requirement is waived by the

Board, the correctness of each report of condition shall be

attested by the signatures of three of the officers of the

reporting credit union with the declaration that the report has

been examined by them and to the best of their knowledge and belief

is true and correct.

(2) The Board may call for such other reports as it may from time

to time require.

(3) The Board may require reports of condition to be published in

such manner, not inconsistent with any applicable law, as it may

direct. Any insured credit union which maintains procedures

reasonably adapted to avoid any inadvertent error and,

unintentionally and as a result of such an error, fails to submit

or publish any report required under this subsection or section

1756 of this title, within the period of time specified by the

Board, or submits or publishes any false or misleading report or

information, or inadvertently transmits or publishes any report

which is minimally late, shall be subject to a penalty of not more

than $2,000 for each day during which such failure continues or

such false or misleading information is not corrected. The insured

credit union shall have the burden of proving that an error was

inadvertent and that a report was inadvertently transmitted or

published late. Any insured credit union which fails to submit or

publish any report required under this subsection or section 1756

of this title, within the period of time specified by the Board, or

submits or publishes any false or misleading report or information,

in a manner not described in the 2nd preceding sentence shall be

subject to a penalty of not more than $20,000 for each day during

which such failure continues or such false or misleading

information is not corrected. Notwithstanding the preceding

sentence, if any insured credit union knowingly or with reckless

disregard for the accuracy of any information or report described

in such sentence submits or publishes any false or misleading

report or information, the Board may assess a penalty of not more

than $1,000,000 or 1 percent of total assets of such credit union,

whichever is less, per day for each day during which such failure

continues or such false or misleading information is not

corrected. Any penalty imposed under any of the 4 preceding

sentences shall be assessed and collected by the Board in the

manner provided in section 1786(k)(2) of this title (for penalties

imposed under such section) and any such assessment (including the

determination of the amount of the penalty) shall be subject to the

provisions of such section. Any insured credit union against which

any penalty is assessed under this subsection shall be afforded an

agency hearing if such insured credit union submits a request for

such hearing within 20 days after the issuance of the notice of

assessment. Section 1786(j) of this title shall apply to any

proceeding under this subsection.

(4) The Board may accept any report of condition made to any

commission, board, or authority having supervision of a

State-chartered credit union and may furnish to any such

commission, board, or authority reports of condition made to the

Board.

(5) Reports required under subchapter I of this chapter shall be

so prepared that they can be used for share insurance purposes. To

the maximum extent feasible, the Board shall use for insurance

purposes reports submitted to State regulatory agencies by

State-chartered credit unions.

(6) Audit requirement. -

(A) In general. - Before the end of the 120-day period

beginning on August 9, 1989, and notwithstanding any other

provision of Federal or State law, the Board shall prescribe, by

regulation, audit standards which require an outside, independent

audit of any insured credit union by a certified public

accountant for any fiscal year (of such credit union) -

(i) for which such credit union has not conducted an annual

supervisory committee audit;

(ii) for which such credit union has not received a complete

and satisfactory supervisory committee audit; or

(iii) during which such credit union has experienced

persistent and serious recordkeeping deficiencies, as

determined by the Board.

(B) Unsafe or unsound practice. - The Board may treat the

failure of any insured credit union to obtain an outside,

independent audit for any fiscal year for which such audit is

required under subparagraph (A) or (D) as an unsafe or unsound

practice within the meaning of section 1786(b) of this title.

(C) Accounting principles. -

(i) In general. - Accounting principles applicable to reports

or statements required to be filed with the Board by each

insured credit union shall be uniform and consistent with

generally accepted accounting principles.

(ii) Board determination. - If the Board determines that the

application of any generally accepted accounting principle to

any insured credit union is not appropriate, the Board may

prescribe an accounting principle for application to the credit

union that is no less stringent than generally accepted

accounting principles.

(iii) De minimus exception. - This subparagraph shall not

apply to any insured credit union, the total assets of which

are less than $10,000,000, unless prescribed by the Board or an

appropriate State credit union supervisor.

(D) Large credit union audit requirement. -

(i) In general. - Each insured credit union having total

assets of $500,000,000 or more shall have an annual independent

audit of the financial statements of the credit union,

performed in accordance with generally accepted auditing

standards by an independent certified public accountant or

public accountant licensed by the appropriate State or

jurisdiction to perform those services.

(ii) Voluntary audits. - If a Federal credit union that is

not required to conduct an audit under clause (i), and that has

total assets of more than $10,000,000 conducts such an audit

for any purpose, using an independent auditor who is

compensated for his or her audit services with respect to that

audit, the audit shall be performed consistent with the

accountancy laws of the appropriate State or jurisdiction,

including licensing requirements.

(7) Report to independent auditor. -

(A) In general. - Each insured credit union which has engaged

the services of an independent auditor to audit such depository

institution within the past 2 years shall transmit to such

auditor a copy of the most recent report of condition made by

such credit union (pursuant to this chapter or any other

provision of law) and a copy of the most recent report of

examination received by such credit union.

(B) Additional information. - In addition to the copies of the

reports required to be provided to an auditor under subparagraph

(A), each insured credit union shall provide such auditor with -

(i) a copy of any supervisory memorandum of understanding

with such credit union and any written agreement between the

Board or a State regulatory agency and the credit union which

is in effect during the period covered by the audit; and

(ii) a report of any action initiated or taken by the Board

during such period under subsection (e), (f), (g), (i), (l), or

(q) of section 1786 of this title, or any similar action taken

by a State regulatory agency under State law, or any other

civil money penalty assessed by the Board under this chapter,

with respect to -

(I) the credit union; or

(II) any institution-affiliated party.

(b) Certified statement

(1) Statement required

(A) In general

For each calendar year, in the case of an insured credit

union with total assets of not more than $50,000,000, and for

each semi-annual period in the case of an insured credit union

with total assets of $50,000,000 or more, an insured credit

union shall file with the Board, at such time as the Board

prescribes, a certified statement showing the total amount of

insured shares in the credit union at the close of the relevant

period and both the amount of its deposit or adjustment of

deposit and the amount of the insurance charge due to the Fund

for that period, both as computed under subsection (c) of this

section.

(B) Exception for newly insured credit union

Subparagraph (A) shall not apply with respect to a credit

union that became insured during the reporting period.

(2) Form

The certified statements required to be filed with the Board

pursuant to this subsection shall be in such form and shall set

forth such supporting information as the Board shall require.

(3) Certification

The president of the credit union or any officer designated by

the board of directors shall certify, with respect to each

statement required to be filed with the Board pursuant to this

subsection, that to the best of his or her knowledge and belief

the statement is true, correct, complete, and in accordance with

this subchapter and the regulations issued under this subchapter.

(c) Deposit with National Credit Union Share Insurance Fund;

amount, return, distribution, etc.

(1)(A)(i) Each insured credit union shall pay to and maintain

with the National Credit Union Share Insurance Fund a deposit in an

amount equaling 1 per centum of the credit union's insured shares.

(ii) The Board may, in its discretion, authorize insured credit

unions to initially fund such deposit over a period of time in

excess of one year if necessary to avoid adverse effects on the

condition of insured credit unions.

(iii) Periodic adjustment. - The amount of each insured credit

union's deposit shall be adjusted as follows, in accordance with

procedures determined by the Board, to reflect changes in the

credit union's insured shares:

(I) annually, in the case of an insured credit union with total

assets of not more than $50,000,000; and

(II) semi-annually, in the case of an insured credit union with

total assets of $50,000,000 or more.

(B)(i) The deposit shall be returned to an insured credit union

in the event that its insurance coverage is terminated, it converts

to insurance coverage from another source, or in the event the

operations of the fund are transferred from the National Credit

Union Administration Board.

(ii) The deposit shall be returned in accordance with procedures

and valuation methods determined by the Board, but in no event

shall the deposit be returned any later than one year after the

final date on which no shares of the credit union are insured by

the Board.

(iii) The deposit shall not be returned in the event of

liquidation on account of bankruptcy or insolvency.

(iv) The deposit funds may be used by the fund if necessary to

meet its expenses, in which case the amount so used shall be

expensed and shall be replenished by insured credit unions in

accordance with procedures established by the Board.

(2) Insurance premium charges. -

(A) In general. - Each insured credit union shall, at such

times as the Board prescribes (but not more than twice in any

calendar year), pay to the Fund a premium charge for insurance in

an amount stated as a percentage of insured shares (which shall

be the same for all insured credit unions).

(B) Relation of premium charge to equity ratio of Fund. - The

Board may assess a premium charge only if -

(i) the Fund's equity ratio is less than 1.3 percent; and

(ii) the premium charge does not exceed the amount necessary

to restore the equity ratio to 1.3 percent.

(C) Premium charge required if equity ratio falls below 1.2

percent. - If the Fund's equity ratio is less than 1.2 percent,

the Board shall, subject to subparagraph (B), assess a premium

charge in such an amount as the Board determines to be necessary

to restore the equity ratio to, and maintain that ratio at, 1.2

percent.

(3) Distributions from Fund required. -

(A) In general. - The Board shall effect a pro rata

distribution to insured credit unions after each calendar year

if, as of the end of that calendar year -

(i) any loans to the Fund from the Federal Government, and

any interest on those loans, have been repaid;

(ii) the Fund's equity ratio exceeds the normal operating

level; and

(iii) the Fund's available assets ratio exceeds 1.0 percent.

(B) Amount of distribution. - The Board shall distribute under

subparagraph (A) the maximum possible amount that -

(i) does not reduce the Fund's equity ratio below the normal

operating level; and

(ii) does not reduce the Fund's available assets ratio below

1.0 percent.

(C) Calculation based on certified statements. - In calculating

the Fund's equity ratio and available assets ratio for purposes

of this paragraph, the Board shall determine the aggregate amount

of the insured shares in all insured credit unions from insured

credit unions certified statements under subsection (b) of this

section of this section for the final reporting period of the

calendar year referred to in subparagraph (A).

(4) Timeliness and accuracy of data. - In calculating the

available assets ratio and equity ratio of the Fund, the Board

shall use the most current and accurate data reasonably available.

(d) Remedy for failure to report; penalty for failure to file

certified statement or pay premium; dispute as to deposit or

premium charge; prohibition on distribution of assets or

dividends while in default

(1) Any insured credit union which fails to make any report of

condition under subsection (a) of this section or to file any

certified statement required to be filed by it in connection with

determining the amount of its deposit or any premium charge for

insurance may be compelled to make such report or to file such

statement by mandatory injunction or other appropriate remedy in a

suit brought for such purpose by the Board against the credit union

and any officer or officers thereof. Any such suit may be brought

in any court of the United States of competent jurisdiction in the

district or territory in which the principal office of the credit

union is located.

(2) Penalty for failure to make accurate certified statement or

to pay deposit or premium. -

(A) First tier. - Any insured credit union which -

(i) maintains procedures reasonably adapted to avoid any

inadvertent error and, unintentionally and as a result of such

an error, fails to submit any certified statement under

subsection (b)(1) of this section within the period of time

required or submits a false or misleading certified statement

under such subsection; or

(ii) submits the statement at a time which is minimally after

the time required,

shall be subject to a penalty of not more than $2,000 for each

day during which such failure continues or such false and

misleading information is not corrected. The insured credit

union shall have the burden of proving that an error was

inadvertent or that a statement was inadvertently submitted late.

(B) Second tier. - Any insured credit union which -

(i) fails to submit any certified statement under subsection

(b)(1) of this section within the period of time required or

submits a false or misleading certified statement in a manner

not described in subparagraph (A); or

(ii) fails or refuses to pay any deposit or premium for

insurance required under this subchapter,

shall be subject to a penalty of not more than $20,000 for each

day during which such failure continues, such false and

misleading information is not corrected, or such deposit or

premium is not paid.

(C) Third tier. - Notwithstanding subparagraphs (A) and (B), if

any insured credit union knowingly or with reckless disregard for

the accuracy of any certified statement under subsection (b)(1)

of this section submits a false or misleading certified statement

under such subsection, the Board may assess a penalty of not more

than $1,000,000 or not more than 1 percent of the total assets of

the credit union, whichever is less, per day for each day during

which the failure continues or the false or misleading

information in such statement is not corrected.

(D) Assessment procedure. - Any penalty imposed under this

paragraph shall be assessed and collected by the Board in the

manner provided in section 1786(k)(2) of this title (for

penalties imposed under such section) and any such assessment

(including the determination of the amount of the penalty) shall

be subject to the provisions of such section.

(E) Hearing. - Any insured credit union against which any

penalty is assessed under this paragraph shall be afforded an

agency hearing if the credit union submits a request for such

hearing within 20 days after the issuance of the notice of the

assessment. Section 1786(j) of this title shall apply to any

proceeding under this subparagraph.

(F) Special rule for disputed payments. - No penalty may be

assessed for the failure of any insured credit union to pay any

deposit or premium for insurance if -

(i) the failure is due to a dispute between the credit union

and the Board over the amount of the deposit or premium which

is due from the credit union; and

(ii) the credit union deposits security satisfactory to the

Board for payment of the deposit or insurance premium upon

final determination of the dispute.

(3) No insured credit union shall pay any dividends on its

insured shares or distribute any of its assets while it remains in

default in the payment of its deposit or any premium charge for

insurance due to the fund. Any director or officer of any insured

credit union who knowingly participates in the declaration or

payment of any such dividend or in any such distribution shall,

upon conviction, be fined not more than $1,000 or imprisoned not

more than one year, or both. The provisions of this paragraph

shall not be applicable in any case in which the default is due to

a dispute between the credit union and the Board over the amount of

its deposit or the premium charge due to the fund if the credit

union deposits security satisfactory to the Board for payment of

its deposit or the premium charge upon final determination of the

issue.

(e) Recovery of unpaid deposit or premium; limitations

The Board, in a suit brought at law or in equity in any court of

competent jurisdiction, shall be entitled to recover from any

insured credit union the amount of any unpaid deposit or premium

charge for insurance lawfully payable by the credit union to the

fund, whether or not such credit union shall have made any report

of condition under subsection (a) of this section or filed any

certified statement required under subsection (b) of this section

and whether or not suit shall have been brought to compel the

credit union to make any such report or to file any such

statement. No action or proceeding shall be brought for the

recovery of any deposit or premium charge due to the fund, or for

the recovery of any amount paid to the fund in excess of the amount

due it, unless such action or proceeding shall have been brought

within five years after the right accrued for which the claim is

made. Where the insured credit union has made or filed with the

Board a false or fraudulent certified statement with the intent to

evade, in whole or in part, the payment of its deposit or any

premium charge, the claim shall not be deemed to have accrued until

the discovery by the Board of the fact that the certified statement

is false or fraudulent.

(f) Penalty for failure to comply with section; court determination

of failure; remedies not exclusive

Should any Federal credit union fail to make any report of

condition under subsection (a) of this section or to file any

certified statement required to be filed under subsection (b) of

this section or to pay its deposit or any premium charge for

insurance required to be paid under any provision of this

subchapter, and should the credit union fail to correct such

failure within thirty days after written notice has been given by

the Board to an officer of the credit union, citing this subsection

and stating that the credit union has failed to make any such

report or file any such statement or pay any such deposit or

premium charges as required by law, all the rights, privileges, and

franchises of the credit union granted to it under subchapter I of

this chapter shall be thereby forfeited. Whether or not the

penalty provided in this subsection has been incurred shall be

determined and adjudged by any court of the United States of

competent jurisdiction in a suit brought for that purpose in the

district or territory in which the principal office of such credit

union is located, under direction of and by the Board in its own

name, before the credit union shall be declared dissolved. The

remedies provided in this subsection and in subsections (d) and (e)

of this section shall not be construed as limiting any other

remedies against any insured credit union but shall be in addition

thereto.

(g) Records

Each insured credit union shall maintain such records as will

readily permit verification of the correctness of its reports of

condition, certified statements, and deposit and premium charges

for insurance. However, no insured credit union shall be required

to retain such records for such purpose for a period in excess of

five years from the date of the making of any such report, the

filing of any such statement, or the payment of any deposit or

adjustment thereof or any premium charge, except that when there is

a dispute between the insured credit union and the Board over the

amount of any deposit or adjustment thereof or any premium charge

for insurance the credit union shall retain such records until

final determination of the issue.

(h) Definitions

For purposes of this section, the following definitions shall

apply:

(1) Available assets ratio

The term ''available assets ratio'', when applied to the Fund,

means the ratio of -

(A) the amount determined by subtracting -

(i) direct liabilities of the Fund and contingent

liabilities for which no provision for losses has been made,

from

(ii) the sum of cash and the market value of unencumbered

investments authorized under section 1783(c) of this title,

to

(B) the aggregate amount of the insured shares in all insured

credit unions.

(2) Equity ratio

The term ''equity ratio'', when applied to the Fund, means the

ratio of -

(A) the amount of Fund capitalization, including insured

credit unions' 1 percent capitalization deposits and the

retained earnings balance of the Fund (net of direct

liabilities of the Fund and contingent liabilities for which no

provision for losses has been made); to

(B) the aggregate amount of the insured shares in all insured

credit unions.

(3) Insured shares

The term ''insured shares'', when applied to this section,

includes share, share draft, share certificate, and other similar

accounts as determined by the Board, but does not include amounts

exceeding the insured account limit set forth in section

1787(c)(1) (FOOTNOTE 1) of this title.

(FOOTNOTE 1) See References in Text note below.

(4) Normal operating level

The term ''normal operating level'', when applied to the Fund,

means an equity ratio specified by the Board, which shall be not

less than 1.2 percent and not more than 1.5 percent.

-SOURCE-

(June 26, 1934, ch. 750, title II, Sec. 202, as added Pub. L.

91-468, Sec. 1(3), Oct. 19, 1970, 84 Stat. 995; amended Pub. L.

93-383, title VII, Sec. 727, Aug. 22, 1974, 88 Stat. 720; Pub. L.

95-630, title V, Sec. 502(b), 505, Nov. 10, 1978, 92 Stat. 3681,

3682; Pub. L. 97-320, title V, Sec. 528, 529, Oct. 15, 1982, 96

Stat. 1535; Pub. L. 97-457, Sec. 29, Jan. 12, 1983, 96 Stat. 2510;

Pub. L. 98-369, div. B, title VIII, Sec. 2802-2810, July 18, 1984,

98 Stat. 1204, 1205; Pub. L. 101-73, title IX, Sec. 911(f), 919,

931(b), Aug. 9, 1989, 103 Stat. 482, 488, 493; Pub. L. 102-242,

title III, Sec. 313(b), Dec. 19, 1991, 105 Stat. 2369; Pub. L.

102-550, title XVI, Sec. 1605(b)(3), Oct. 28, 1992, 106 Stat. 4087;

Pub. L. 105-219, title II, Sec. 201, title III, Sec. 302(a), Aug.

7, 1998, 112 Stat. 918, 931.)

-REFTEXT-

REFERENCES IN TEXT

Section 1787(c)(1) of this title, referred to in subsec. (h)(3),

was redesignated section 1787(k)(1) of this title by Pub. L.

101-73, title XII, Sec. 1217(a)(3), Aug. 9, 1989, 103 Stat. 530.

-MISC2-

AMENDMENTS

1998 - Subsec. (a)(6). Pub. L. 105-219, Sec. 201, substituted

''subparagraph (A) or (D)'' for ''subparagraph (A)'' in subpar. (B)

and added subpars. (C) and (D).

Subsec. (b). Pub. L. 105-219, Sec. 302(a)(1), added subsec. (b)

and struck out former subsec. (b) which read as follows:

''(b)(1) For each insurance year, each insured credit union which

became insured prior to the beginning of that year shall file with

the Board, at such time as the Board prescribes, a certified

statement showing the total amount of insured shares in the credit

union at the close of the preceding insurance year and both the

amount of its deposit or adjustment thereof and the amount of the

premium charge for insurance due to the fund for that year, both as

computed under subsection (c) of this section.

''(2) The certified statements required to be filed with the

Board pursuant to this subsection shall be in such form and shall

set forth such supporting information as the Board shall require.

''(3) Each such statement shall be certified by the president of

the credit union, or by any officer of the credit union designated

by its board of directors, that to the best of his knowledge and

belief that statement is true, correct, and complete and in

accordance with this subchapter and regulations issued

thereunder.''

Subsec. (c)(1)(A)(iii). Pub. L. 105-219, Sec. 302(a)(2), added

cl. (iii) and struck out former cl. (iii) which read as follows:

''The amount of each insured credit union's deposit shall be

adjusted annually, in accordance with procedures determined by the

Board, to reflect changes in the credit union's insured shares.''

Subsec. (c)(2), (3). Pub. L. 105-219, Sec. 302(a)(3), added pars.

(2) and (3) and struck out former pars. (2) and (3) which read as

follows:

''(2) Each insured credit union, at such time as the Board

prescribes, shall pay to the fund a premium charge for insurance

equal to one-twelfth of 1 per centum of the total amount of the

insured shares in such credit union at the close of the preceding

insurance year.

''(3) When, at the end of a given insurance year, any loans to

the fund from the Federal Government and the interest thereon have

been repaid and the equity of the fund exceeds the normal operating

level, the Board shall effect for that insurance year a pro rata

distribution to insured credit unions of an amount sufficient to

reduce the equity in the fund to its normal operating level.''

Subsec. (c)(4). Pub. L. 105-219, Sec. 302(a)(4), added par. (4).

Subsec. (h). Pub. L. 105-219, Sec. 302(a)(5), added subsec. (h)

and struck out former subsec. (h) which read as follows: ''For the

purposes of this section -

''(1) the term 'insurance year' means the period beginning on

January 1 and ending on the following December 31, both dates

inclusive, unless otherwise prescribed by the Board;

''(2) the term 'normal operating level', when applied to the

fund, means an amount equal to 1.3 per centum of the aggregate

amount of the insured shares in all insured credit unions, or

such lower level as the Board may determine; and

''(3) the term 'insured shares' when applied to this section

includes share, share draft, share certificate and other similar

accounts as determined by the Board, but does not include amounts

in excess of the insured account limit set forth in section

1787(c)(1) of this title.''

1992 - Subsec. (d)(2). Pub. L. 102-550, in subpar. (C),

substituted ''insured credit union'' for ''insured depository

institution'', struck out ''or'' after ''subsection (b)(1) of this

section'', and substituted ''Board'' for ''Corporation'' and

''assets of the credit union'' for ''assets of the institution'',

in subpar. (D), substituted ''Board'' for ''Corporation'', and in

subpar. (E), substituted ''insured credit union'' for ''insured

depository institution'' and ''if the credit union'' for ''if the

institution''.

1991 - Subsec. (d)(2). Pub. L. 102-242 amended par. (2)

generally. Prior to amendment, par. (2) read as follows: ''Any

insured credit union which willfully fails or refuses to file any

certified statement or to pay its deposit or any premium charge for

insurance required under this subchapter shall be subject to a

penalty of not more than $100 for each day that such violation

continues, which penalty the Board may recover for its use. The

provisions of this paragraph shall not be applicable in any case in

which the refusal to pay its deposit or the premium charge for

insurance is due to a dispute between the insured credit union and

the Board over the amount of its deposit or the premium charge due

to the fund if the credit union deposits security satisfactory to

the Board for payment of its deposit or the premium charge upon

final determination of the issue.''

1989 - Subsec. (a)(3). Pub. L. 101-73, Sec. 911(f), inserted

provisions relating to penalties and agency hearings and struck out

at end: ''Every insured credit union which willfully fails to make

or publish any such report within ten days shall be subject to a

penalty of not more than $100 for each day of such failure,

recoverable by the Board for its use.''

Subsec. (a)(6). Pub. L. 101-73, Sec. 919, added par. (6).

Subsec. (a)(7). Pub. L. 101-73, Sec. 931(b), added par. (7).

1984 - Subsec. (b). Pub. L. 98-369, Sec. 2802, in amending

subsec. (b) generally, revised existing provisions into numbered

pars. (1) to (3) and in par. (1) substituted ''For each insurance

year, each insured credit union which became insured prior to the

beginning of that year shall file with the Board, at such time as

the Board prescribes, a certified statement showing the total

amount of insured shares in the credit union at the close of the

preceding insurance year and both the amount of its deposit or

adjustment thereof and the amount of the premium charge for

insurance due to the fund for that year, both as computed under

subsection (c) of this section.'' for ''On or before January 31 of

each insurance year, each insured credit union which became insured

prior to the beginning of that year shall file with the Board a

certified statement showing the total amount of the member accounts

in the credit union at the close of the preceding insurance year

and the amount of the premium charge for insurance due to the fund

for that year, as computed under subsection (c) of this section.''

Subsec. (c)(1). Pub. L. 98-369, Sec. 2803(6), added par. (1).

Former par. (1) redesignated (2).

Subsec. (c)(2). Pub. L. 98-369, Sec. 2803(3)-(5), substituted

''Each insured credit union, at such time as the Board prescribes''

for ''Except as provided in paragraph (2) of this subsection, each

insured credit union, on or before January 31 of each insurance

year'' and ''insured shares'' for ''member accounts''.

Pub. L. 98-369, Sec. 2803(1), (2), redesignated par. (1) as (2).

Former par. (2), which related to payment of a premium charge for

insurance by each credit union in existence prior to Oct. 19, 1970,

and insured under this subchapter after January 1 of any insurance,

was struck out.

Subsec. (c)(3). Pub. L. 98-369, Sec. 2804, amended par. (3)

generally. Prior to amendment, par. (3) read as follows: ''When

any loans to the fund from the Federal Government and the interest

thereon have been repaid and the amount in the fund equals or

exceeds the normal operating level, the Board may reduce the

premium charge for insurance, but not below the amount necessary,

in its judgment, to maintain the fund at the normal operating

level. Any such reduction shall be effective only so long as the

amount in the fund equals or exceeds the normal operating level and

no loan to the fund from the Federal Government is outstanding.''

Subsec. (c)(4). Pub. L. 98-369, Sec. 2805, struck out par. (4)

which provided that ''If in any year expenditures from the fund

exceed the income of the fund, the Board may require each insured

credit union to pay to the fund for such year, in addition to the

regular premium charge for insurance payable under paragraph (1),

(2), or (3) of this subsection, a special premium charge which

shall not exceed an amount equal to the amount of the regular

premium charge''.

Subsec. (d)(1), (2). Pub. L. 98-369, Sec. 2806(a)(1), inserted

''its deposit or'' wherever appearing.

Subsec. (d)(3). Pub. L. 98-369, Sec. 2806(a), inserted ''its

deposit or'' wherever appearing and substituted ''insured shares''

for ''member accounts''.

Subsec. (e). Pub. L. 98-369, Sec. 2806(a)(1), (b)(1), (2),

inserted ''its deposit or'' and ''deposit or'' wherever appearing.

Subsec. (f). Pub. L. 98-369, Sec. 2806(a)(1), (b)(3), inserted

''its deposit or'' and ''deposit or''.

Subsec. (g). Pub. L. 98-369, Sec. 2807, inserted ''and deposit''

and ''deposit or adjustment thereof or any'' in two places.

Subsec. (h)(1). Pub. L. 98-369, Sec. 2808, inserted '', unless

otherwise prescribed by the Board''.

Subsec. (h)(2). Pub. L. 98-369, Sec. 2809, in amending par. (2)

generally, substituted ''fund, means an amount equal to 1.3 per

centum of the aggregate amount of the insured shares in all insured

credit unions, or such lower level as the Board may determine'' for

''Fund, means an amount equal to 1 per centum of the aggregate

amount of the member accounts in all insured credit unions''.

Subsec. (h)(3). Pub. L. 98-369, Sec. 2810, amended par. (3)

generally. Prior to amendment, par. (3) read as follows: ''the

term 'members accounts' when applied to the premium charge for

insurance of accounts shall not include amounts received from other

credit unions, the accounts of which are federally insured or

insured or guaranteed by a fund established under State law or

regulation for this purpose, in excess of the insured account limit

set forth in section 1787(c)(1) of this title;''.

1983 - Subsec. (c)(1). Pub. L. 97-457 substituted ''paragraph

(2)'' for ''paragraphs (2) and (3)'' after ''except as provided

in''.

1982 - Subsec. (c)(3). Pub. L. 97-320, Sec. 529, redesignated

par. (4) as (3). Former (3), which set forth rules for computing

the insurance premiums due from credit unions chartered after Oct.

19, 1970, that became insured in the insurance year of their

charter, was struck out.

Subsec. (c)(4), (5). Pub. L. 97-320, Sec. 529, redesignated par.

(5) as (4). Former par. (4) redesignated (3).

Subsec. (c)(6). Pub. L. 97-320, Sec. 529, struck out par. (6)

which set forth rules for payment of insurance rebates to insured

credit unions closed for liquidation because of insolvency or

otherwise.

Subsec. (h)(3). Pub. L. 97-320, Sec. 528, substituted '' 'members

accounts' '' for '' 'member account' '', struck out ''federally

insured'' after ''received from other'', and inserted '', the

accounts of which are federally insured or insured or guaranteed by

a fund established under State law or regulation for this

purpose,'' after ''credit unions''.

1978 - Subsec. (a). Pub. L. 95-630, Sec. 502(b), 505(a),

substituted ''Board'' for ''Administrator'' wherever appearing;

''it'' for ''him'' and ''such officer's knowledge'' for ''his

knowledge'' in par. (1); ''reports as it'' for ''reports as he'' in

par. (2); and ''it may direct'' for ''he may direct'' and ''for its

use'' for ''for his use'' in par. (3).

Subsecs. (b) to (g). Pub. L. 95-630, Sec. 502(b), substituted

''Board'' for ''Administrator'' wherever appearing, and ''its'' for

''his'' where appropriate.

Subsec. (h)(3). Pub. L. 95-630, Sec. 505(b), substituted ''The

term 'member account' when'' for ''the term 'members accounts'

when'', struck out ''of federally insured credit unions'' after

''of accounts'', and inserted ''received from other federally

insured credit unions'' after ''not include amounts''.

1974 - Subsec. (h)(3). Pub. L. 93-383 added par. (3).

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-219, title III, Sec. 302(b), Aug. 7, 1998, 112 Stat.

934, provided that: ''This section (amending this section) and the

amendments made by this section shall become effective on January 1

of the first calendar year beginning more than 180 days after the

date of enactment of this Act (Aug. 7, 1998).''

EFFECTIVE DATE OF 1992 AMENDMENT

Amendment by Pub. L. 102-550 effective as if included in the

Federal Deposit Insurance Corporation Improvement Act of 1991, Pub.

L. 102-242, as of Dec. 19, 1991, see section 1609(a) of Pub. L.

102-550, set out as a note under section 191 of this title.

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by section 911(f) of Pub. L. 101-73 applicable with

respect to reports filed or required to be filed after Aug. 9,

1989, see section 911(i) of Pub. L. 101-73, set out as a note under

section 161 of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 461, 1783, 1786 of this

title.

-CITE-

12 USC Sec. 1783 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER II - SHARE INSURANCE

-HEAD-

Sec. 1783. National Credit Union Share Insurance Fund

-STATUTE-

(a) Creation; use of fund

There is hereby created in the Treasury of the United States a

National Credit Union Share Insurance Fund which shall be used by

the Board as a revolving fund for carrying out the purposes of this

subchapter. Money in the fund shall be available upon requisition

by the Board, without fiscal year limitation, for making payments

of insurance under section 1787 of this title, for providing

assistance and making expenditures under section 1788 of this title

in connection with the liquidation or threatened liquidation of

insured credit unions, and for such administrative and other

expenses incurred in carrying out the purposes of this subchapter

as it may determine to be proper.

(b) Deposit of deposits and premium charges, fees and penalties

All deposits and premium charges for insurance paid pursuant to

the provisions of section 1782 of this title and all fees for

examinations and all penalties collected by the Board under any

provision of this subchapter shall be deposited in the National

Credit Union Share Insurance Fund. The Board shall report annually

to the Committee on Banking, Housing, and Urban Affairs of the

Senate and the Committee on Banking, Finance and Urban Affairs of

the House of Representatives with respect to the operating level of

the fund. Such report shall also include the results of an

independent audit of the fund.

(c) Investment authorization

The Board may authorize the Secretary of the Treasury to invest

and reinvest such portions of the fund as the Board may determine

are not needed for current operations in any interest-bearing

securities of the United States or in any securities guaranteed as

to both principal and interest by the United States or in bonds or

other obligations which are lawful investments for fiduciary,

trust, and public funds of the United States, and the income

therefrom shall constitute a part of the fund.

(d) Loans to fund, limitation and terms; interest accrual;

determination of interest rate

(1) If, in the judgment of the Board, a loan to the fund is

required at any time for carrying out the purposes of this

subchapter, the Secretary of the Treasury shall make the loan, but

loans under this paragraph shall not exceed in the aggregate

$100,000,000 outstanding at any one time. Except as otherwise

provided in this subsection and in subsection (e) of this section,

each loan under this paragraph shall be made on such terms as may

be fixed by agreement between the Board and the Secretary of the

Treasury.

(2) Interest shall accrue to the Treasury on the amount of any

outstanding loans made to the fund pursuant to paragraph (1) of

this subsection on the basis of the average daily amount of such

outstanding loans determined at the close of each fiscal year with

respect to such year, and the Board shall pay the interest so

accruing into the Treasury as miscellaneous receipts annually from

the fund. The Secretary of the Treasury shall determine the

applicable interest rate in advance by calculating the average

yield to maturity (on the basis of daily closing market bid

quotations during the month of September of the preceding fiscal

year) on outstanding marketable public debt obligations of the

United States having a maturity date of five or less years from the

first day of such month of September and by adjusting such yield to

the nearest one-eighth of 1 per centum.

(3) For the purpose of making loans under paragraph (1) of this

subsection, the Secretary of the Treasury is authorized to use as a

public debt transaction the proceeds of the sale of any securities

issued under chapter 31 of title 31, and the purposes for which

securities may be issued under chapter 31 of title 31 are hereby

extended to include such loans. All loans and repayments under

this section shall be treated as public debt transactions of the

United States.

(e) Excess funds credited against loans

So long as any loans to the fund are outstanding, the Board shall

from time to time, not less often than annually, determine whether

the balance in the fund is in excess of the amount which, in its

judgment, is needed to meet the requirements of the fund and shall

pay such excess to the Secretary of the Treasury, to be credited

against the loans to the fund.

(f) Authorization for fund to borrow from Central Liquidity

Facility

In addition to the authority to borrow from the Secretary of the

Treasury provided in subsection (d) of this section, if in the

judgment of the Board, a loan to the fund is required at any time

for carrying out the purposes of this subchapter, the fund is

authorized to borrow from the National Credit Union Administration

Central Liquidity Facility.

-SOURCE-

(June 26, 1934, ch. 750, title II, Sec. 203, as added Pub. L.

91-468, Sec. 1(3), Oct. 19, 1970, 84 Stat. 999; amended Pub. L.

94-273, Sec. 2(4), Apr. 21, 1976, 90 Stat. 375; Pub. L. 95-630,

title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681; Pub. L. 97-320,

title V, Sec. 530, Oct. 15, 1982, 96 Stat. 1535; Pub. L. 98-369,

div. B, title VIII, Sec. 2811, July 18, 1984, 98 Stat. 1206.)

-COD-

CODIFICATION

In subsec. (d)(3), ''chapter 31 of title 31'' substituted for

''the Second Liberty Bond Act, as amended'' on authority of Pub. L.

97-258, Sec. 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section

of which enacted Title 31, Money and Finance.

-MISC3-

AMENDMENTS

1984 - Subsec. (b). Pub. L. 98-369 inserted ''deposits and'' and

provisions relating to annual reporting requirements by the Board.

1982 - Subsec. (f). Pub. L. 97-320 added subsec. (f).

1978 - Pub. L. 95-630 substituted ''Board'' for ''Administrator''

wherever appearing and ''it'' and ''its'' for ''he'' and ''his'',

respectively, where appropriate.

1976 - Subsec. (d)(2). Pub. L. 94-273 substituted ''September''

for ''June'' wherever appearing.

-CHANGE-

CHANGE OF NAME

Committee on Banking, Finance and Urban Affairs of House of

Representatives treated as referring to Committee on Banking and

Financial Services of House of Representatives by section 1(a) of

Pub. L. 104-14, set out as a note preceding section 21 of Title 2,

The Congress. Committee on Banking and Financial Services of House

of Representatives abolished and replaced by Committee on Financial

Services of House of Representatives, and jurisdiction over matters

relating to securities and exchanges and insurance generally

transferred from Committee on Energy and Commerce of House of

Representatives by House Resolution No. 5, One Hundred Seventh

Congress, Jan. 3, 2001.

-MISC4-

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1781, 1782 of this title.

-CITE-

12 USC Sec. 1784 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER II - SHARE INSURANCE

-HEAD-

Sec. 1784. Examination of insured credit unions

-STATUTE-

(a) Examiners and claim agents; powers; report by examiner;

jurisdiction of court

The Board shall appoint examiners who shall have power, on its

behalf, to examine any insured credit union, any credit union

making application for insurance of its member accounts, or any

closed insured credit union whenever in the judgment of the Board

an examination is necessary to determine the condition of any such

credit union for insurance purposes. Each examiner shall have

power to make a thorough examination of all of the affairs of the

credit union and shall make a full and detailed report of the

condition of the credit union to the Board. The Board in like

manner shall appoint claim agents who shall have power to

investigate and examine all claims for insured member accounts.

Each claim agent shall have power to administer oaths and

affirmations, to examine and to take and preserve testimony under

oath as to any matter in respect to claims for insured accounts,

and to issue subpenas and subpenas duces tecum and, for the

enforcement thereof, to apply to the United States district court

for the judicial district or the United States court in any

territory in which the principal office of the credit union is

located or in which the witness resides or carries on business.

Such courts shall have jurisdiction and power to order and require

compliance with any such subpena.

(b) Power of Board; jurisdiction of court

In connection with examinations of insured credit unions, or with

other types of investigations to determine compliance with

applicable law and regulations, the Board, or its designated

representatives, shall have power to administer oaths and

affirmations, to examine and to take and preserve testimony under

oath as to any matter in respect of the affairs of any such credit

union, and to issue subpenas and subpenas duces tecum and to

exercise such others (FOOTNOTE 1) powers as are set forth in

section 1786(p) of this title and, for the enforcement thereof, to

apply to the United States district court for the judicial district

or the United States Court in any territory in which the principal

office of the credit union is located or in which the witness

resides or carries on business. Such courts shall have

jurisdiction and power to order and require compliance with any

such subpena.

(FOOTNOTE 1) So in original. Probably should be ''other''.

(c) Court orders enforcing subpenas; immunity

In cases of refusal to obey a subpena issued to, or contumacy by,

any person, the Board may invoke the aid of any court of the United

States within the jurisdiction of which such hearing, examination,

or investigation is carried on, or where such person resides or

carries on business, in requiring the attendance and testimony of

witnesses and the production of books, records, or other papers.

Such court may issue an order requiring such person to appear

before the Board, or before a person designated by it, there to

produce records, if so ordered, or to give testimony touching the

matter in question. Any failure to obey such order of the court

may be punished by such court as a contempt thereof. All process

in any such case may be served in the judicial district whereof

such person is an inhabitant or carries on business or wherever he

may be found. No person shall be excused from attending and

testifying or from producing books, records, or other papers in

obedience to a subpena issued under the authority of this

subchapter on the ground that the testimony or evidence,

documentary or otherwise, required of him may tend to incriminate

him or subject him to penalty or forfeiture, but no individual

shall be prosecuted or subject to any penalty or forfeiture for or

on account of any transaction, matter, or thing concerning which he

is compelled to testify or produce evidence, documentary or

otherwise, after having claimed his privilege against

self-incrimination, except that such individual so testifying shall

not be exempt from prosecution and punishment for perjury committed

in so testifying.

(d) Administration acceptance of State board reports; reports of

Board furnished to State board

The Administration may accept any report of examination made by

or to any commission, board, or authority having supervision of a

State-chartered credit union and may furnish to any such

commission, board, or authority reports of examination made on

behalf of the Board.

(e) Flood insurance compliance by insured credit unions

(1) Examination

The Board shall, during each examination conducted under this

section, determine whether the insured credit union is complying

with the requirements of the national flood insurance program.

(2) Report

(A) Requirement

Not later than 1 year after September 23, 1994, and

biennially thereafter for the next 4 years, the Board shall

submit a report to the Congress on compliance by insured credit

unions with the requirements of the national flood insurance

program.

(B) Contents

The report shall include a description of the methods used to

determine compliance, the number of insured credit unions

examined during the reporting year, a listing and total number

of insured credit unions found not to be in compliance, actions

taken to correct incidents of noncompliance, and an analysis of

compliance, including a discussion of any trends, patterns, and

problems, and recommendations regarding reasonable actions to

improve the efficiency of the examinations processes.

(f) Access to liquidity

The Board shall -

(1) periodically assess the potential liquidity needs of each

insured credit union, and the options that the credit union has

available for meeting those needs; and

(2) periodically assess the potential liquidity needs of

insured credit unions as a group, and the options that insured

credit unions have available for meeting those needs.

(g) Sharing information with Federal reserve banks

The Board shall, for the purpose of facilitating insured credit

unions' access to liquidity, make available to the Federal reserve

banks (subject to appropriate assurances of confidentiality)

information relevant to making advances to such credit unions,

including the Board's reports of examination.

-SOURCE-

(June 26, 1934, ch. 750, title II, Sec. 204, as added Pub. L.

91-468, Sec. 1(3), Oct. 19, 1970, 84 Stat. 1001; amended Pub. L.

95-630, title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681; Pub. L.

101-73, title IX, Sec. 915(a), Aug. 9, 1989, 103 Stat. 486; Pub. L.

103-325, title V, Sec. 529(b), Sept. 23, 1994, 108 Stat. 2266; Pub.

L. 105-219, title III, Sec. 303, Aug. 7, 1998, 112 Stat. 934.)

-MISC1-

AMENDMENTS

1998 - Subsecs. (f), (g). Pub. L. 105-219 added subsecs. (f) and

(g).

1994 - Subsec. (e). Pub. L. 103-325 added subsec. (e).

1989 - Subsec. (b). Pub. L. 101-73, Sec. 915(a)(1), inserted ''or

with other types of investigations to determine compliance with

applicable law and regulations,'' after ''insured credit unions,''.

Pub. L. 101-73, Sec. 915(a)(2), which directed the insertion of

''and to exercise such others powers as are set forth in section

1786(p) of this title'' after ''subpena duces tecum'', was executed

by making the insertion after ''subpenas duces tecum'', as the

probable intent of Congress.

1978 - Pub. L. 95-630 substituted ''Board'' for ''Administrator''

wherever appearing, and ''it'' and ''its'' for ''him'' and ''his'',

respectively, where appropriate.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1786 of this title.

-CITE-

12 USC Sec. 1785 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER II - SHARE INSURANCE

-HEAD-

Sec. 1785. Requirements governing insured credit unions

-STATUTE-

(a) Advertisement of insured status; exemptions; regulation of

signs

Every insured credit union shall display at each place of

business maintained by it a sign or signs indicating that its

member accounts are insured by the Board and shall include in all

of its advertisements a statement to the effect that its member

accounts are insured by the Board. The Board may exempt from this

requirement advertisements which do not relate to member accounts

or advertisements in which it is impractical to include such a

statement. The Board shall prescribe by regulation the forms of

such signs, the manner of display, the substance of any such

statement, and the manner of use.

(b) Restrictions

(1) Except as provided in paragraph (2), no insured credit union

shall, without the prior approval of the Board -

(A) merge or consolidate with any noninsured credit union or

institution;

(B) assume liability to pay any member accounts in, or similar

liabilities of, any noninsured credit union or institution;

(C) transfer assets to any noninsured credit union or

institution in consideration of the assumption of liabilities for

any portion of the member accounts in such insured credit union;

or

(D) convert into a noninsured credit union or institution.

(2) Conversion of insured credit unions to mutual savings banks.

-

(A) In general. - Notwithstanding paragraph (1), an insured

credit union may convert to a mutual savings bank or savings

association (if the savings association is in mutual form), as

those terms are defined in section 1813 of this title, without

the prior approval of the Board, subject to the requirements and

procedures set forth in the laws and regulations governing mutual

savings banks and savings associations.

(B) Conversion proposal. - A proposal for a conversion

described in subparagraph (A) shall first be approved, and a date

set for a vote thereon by the members (either at a meeting to be

held on that date or by written ballot to be filed on or before

that date), by a majority of the directors of the insured credit

union. Approval of the proposal for conversion shall be by the

affirmative vote of a majority of the members of the insured

credit union who vote on the proposal.

(C) Notice of proposal to members. - An insured credit union

that proposes to convert to a mutual savings bank or savings

association under subparagraph (A) shall submit notice to each of

its members who is eligible to vote on the matter of its intent

to convert -

(i) 90 days before the date of the member vote on the

conversion;

(ii) 60 days before the date of the member vote on the

conversion; and

(iii) 30 days before the date of the member vote on the

conversion.

(D) Notice of proposal to board. - The Board may require an

insured credit union that proposes to convert to a mutual savings

bank or savings association under subparagraph (A) to submit a

notice to the Board of its intent to convert during the 90-day

period preceding the date of the completion of the conversion.

(E) Inapplicability of chapter upon conversion. - Upon

completion of a conversion described in subparagraph (A), the

credit union shall no longer be subject to any of the provisions

of this chapter.

(F) Limit on compensation of officials. -

(i) In general. - No director or senior management official

of an insured credit union may receive any economic benefit in

connection with a conversion of the credit union as described

in subparagraph (A), other than -

(I) director fees; and

(II) compensation and other benefits paid to directors or

senior management officials of the converted institution in

the ordinary course of business.

(ii) Senior management official. - For purposes of this

subparagraph, the term ''senior management official'' means a

chief executive officer, an assistant chief executive officer,

a chief financial officer, and any other senior executive

officer (as defined by the appropriate Federal banking agency

pursuant to section 1831i(f) of this title).

(G) Consistent rules. -

(i) In general. - Not later than 6 months after August 7,

1998, the Administration shall promulgate final rules

applicable to charter conversions described in this paragraph

that are consistent with rules promulgated by other financial

regulators, including the Office of Thrift Supervision and the

Office of the Comptroller of the Currency. The rules required

by this clause shall provide that charter conversion by an

insured credit union shall be subject to regulation that is no

more or less restrictive than that applicable to charter

conversions by other financial institutions.

(ii) Oversight of member vote. - The member vote concerning

charter conversion under this paragraph shall be administered

by the Administration, and shall be verified by the Federal or

State regulatory agency that would have jurisdiction over the

institution after the conversion. If either the Administration

or that regulatory agency disapproves of the methods by which

the member vote was taken or procedures applicable to the

member vote, the member vote shall be taken again, as directed

by the Administration or the agency.

(3) Except with the prior written approval of the Board, no

insured credit union shall merge or consolidate with any other

insured credit union or, either directly or indirectly, acquire the

assets of, or assume liability to pay any member accounts in, any

other insured credit union.

(c) Considerations for waiver or enforcement of restrictions

In granting or withholding approval or consent under subsection

(b) of this section, the Board shall consider -

(1) the history, financial condition, and management policies

of the credit union;

(2) the adequacy of the credit union's reserves;

(3) the economic advisability of the transaction;

(4) the general character and fitness of the credit union's

management;

(5) the convenience and needs of the members to be served by

the credit union; and

(6) whether the credit union is a cooperative association

organized for the purpose of promoting thrift among its members

and creating a source of credit for provident or productive

purposes.

(d) Prohibition

(1) In general

Except with prior written consent of the Board -

(A) any person who has been convicted of any criminal offense

involving dishonesty or a breach of trust, or has agreed to

enter into a pretrial diversion or similar program in

connection with a prosecution for such offense, may not -

(i) become, or continue as, an institution-affiliated party

with respect to any insured credit union; or

(ii) otherwise participate, directly or indirectly, in the

conduct of the affairs of any insured credit union; and

(B) any insured credit union may not permit any person

referred to in subparagraph (A) to engage in any conduct or

continue any relationship prohibited under such subparagraph.

(2) Minimum 10-year prohibition period for certain offenses

(A) In general

If the offense referred to in paragraph (1)(A) in connection

with any person referred to in such paragraph is -

(i) an offense under -

(I) section 215, 656, 657, 1005, 1006, 1007, 1008,

(FOOTNOTE 1) 1014, 1032, 1344, 1517, 1956, or 1957 of title

18; or

(FOOTNOTE 1) See References in Text note below.

(II) section 1341 or 1343 of such title which affects any

financial institution (as defined in section 20 of such

title); or

(ii) the offense of conspiring to commit any such offense,

the Board may not consent to any exception to the application

of paragraph (1) to such person during the 10-year period

beginning on the date the conviction or the agreement of the

person becomes final.

(B) Exception by order of sentencing court

(i) In general

On motion of the Board, the court in which the conviction

or the agreement of a person referred to in subparagraph (A)

has been entered may grant an exception to the application of

paragraph (1) to such person if granting the exception is in

the interest of justice.

(ii) Period for filing

A motion may be filed under clause (i) at any time during

the 10-year period described in subparagraph (A) with regard

to the person on whose behalf such motion is made.

(3) Penalty

Whoever knowingly violates paragraph (1) or (2) shall be fined

not more than $1,000,000 for each day such prohibition is

violated or imprisoned for not more than 5 years, or both.

(e) Security standards; reports; penalty

(1) The Board shall promulgate rules establishing minimum

standards with which each insured credit union must comply with

respect to the installation, maintenance, and operation of security

devices and procedures, reasonable in cost, to discourage

robberies, burglaries, and larcenies and to assist in the

identification and apprehension of persons who commit such acts.

(2) The rules shall establish the time limits within which

insured credit unions shall comply with the standards and shall

require the submission of periodic reports with respect to the

installation, maintenance, and operation of security devices and

procedures.

(3) An insured credit union which violates a rule promulgated

pursuant to this subsection shall be subject to a civil penalty

which shall not exceed $100 for each day of the violation.

(f) Share draft accounts; maintenance, loans, etc.

(1) Every insured credit union is authorized to maintain, and

make loans with respect to, share draft accounts in accordance with

rules and regulations prescribed by the Board. Except as provided

in paragraph (2), an insured credit union may pay dividends on

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.

(2) Paragraph (1) shall apply only with respect to share draft

accounts in which the entire beneficial interest is held by one or

more individuals or members or by an organization which is operated

primarily for religious, philanthropic, charitable, educational, or

other similar purposes and which is not operated for profit, and

with respect to deposits of public funds by an officer, employee,

or agent of the United States, any State, county, municipality, or

political subdivision thereof, the District of Columbia, the

Commonwealth of Puerto Rico, American Samoa, Guam, any territory or

possession of the United States, or any political subdivision

thereof.

(g) Interest rates

(1) If the applicable rate prescribed in this subsection exceeds

the rate an insured credit union would be permitted to charge in

the absence of this subsection, such credit union may,

notwithstanding any State constitution or statute which is hereby

preempted for the purposes of this subsection, take, receive,

reserve, and charge on any loan, interest at a rate of not more

than 1 per centum in excess of the discount rate on ninety-day

commercial paper in effect at the Federal Reserve bank in the

Federal Reserve district where such insured credit union is located

or at the rate allowed by the laws of the State, territory, or

district where such credit union is located, whichever may be

greater.

(2) If the rate prescribed in paragraph (1) exceeds the rate such

credit union would be permitted to charge in the absence of this

subsection, and such State fixed rate is thereby preempted by the

rate described in paragraph (1), the taking, receiving, reserving,

or charging a greater rate than is allowed by paragraph (1), when

knowingly done, shall be deemed a forfeiture of the entire interest

which the loan carries with it, or which has been agreed to be paid

thereon. If such greater rate of interest has been paid, the

person who paid it may recover, in a civil action commenced in a

court of appropriate jurisdiction not later than two years after

the date of such payment, an amount equal to twice the amount of

interest paid from the credit union taking or receiving such

interest.

(h) Emergency merger

Notwithstanding any other provision of law, the Board may

authorize a merger or consolidation of an insured credit union

which is insolvent or is in danger of insolvency with any other

insured credit union or may authorize an insured credit union to

purchase any of the assets of, or assume any of the liabilities of,

any other insured credit union which is insolvent or in danger of

insolvency if the Board is satisfied that -

(1) an emergency requiring expeditious action exists with

respect to such other insured credit union;

(2) other alternatives are not reasonably available; and

(3) the public interest would best be served by approval of

such merger, consolidation, purchase, or assumption.

(i) Emergency purchase of assets; conversion to insured deposits

(1) Notwithstanding any other provision of this chapter or of

State law, the Board may authorize an institution whose deposits or

accounts are insured by the Federal Deposit Insurance Corporation

or the Federal Savings and Loan Insurance Corporation to purchase

any of the assets of or assume any of the liabilities of an insured

credit union which is insolvent or in danger of insolvency, except

that prior to exercising this authority the Board must attempt to

effect the merger or consolidation of an insured credit union which

is insolvent or in danger of insolvency with another insured credit

union, as provided in subsection (h) of this section.

(2) For purposes of the authority contained in paragraph (1),

insured accounts of the credit union may upon consummation of the

purchase and assumption be converted to insured deposits or other

comparable accounts in the acquiring institution, and the Board and

the National Credit Union Share Insurance Fund shall be absolved of

any liability to the credit union's members with respect to those

accounts.

-SOURCE-

(June 26, 1934, ch. 750, title II, Sec. 205, as added Pub. L.

91-468, Sec. 1(3), Oct. 19, 1970, 84 Stat. 1002; amended Pub. L.

95-630, title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3681; Pub. L.

96-221, title III, Sec. 305(d), title V, Sec. 523, Mar. 31, 1980,

94 Stat. 147, 166; Pub. L. 97-320, title I, Sec. 131, 141(a)(8),

title VII, Sec. 706(b), Oct. 15, 1982, 96 Stat. 1486, 1489, 1540;

Pub. L. 100-86, title V, Sec. 509(a), Aug. 10, 1987, 101 Stat. 635;

Pub. L. 101-73, title IX, Sec. 910(b), Aug. 9, 1989, 103 Stat. 478;

Pub. L. 103-322, title XXXII, Sec. 320606, Sept. 13, 1994, 108

Stat. 2119; Pub. L. 105-219, title II, Sec. 202, Aug. 7, 1998, 112

Stat. 919.)

-REFTEXT-

REFERENCES IN TEXT

Section 1008 of title 18, referred to in subsec. (d)(2)(A)(i)(I),

was repealed by Pub. L. 101-73, title IX, Sec. 961(g)(1), Aug. 9,

1989, 103 Stat. 500.

-MISC2-

AMENDMENTS

1998 - Subsec. (b)(1). Pub. L. 105-219, Sec. 202(1), substituted

''Except as provided in paragraph (2), no insured credit union

shall, without the prior approval of the Board'' for ''Except with

the prior written approval of the Board, no insured credit union

shall''.

Subsec. (b)(2), (3). Pub. L. 105-219, Sec. 202(2), (3), added

par. (2) and redesignated former par. (2) as (3).

1994 - Subsec. (d). Pub. L. 103-322 amended heading and text of

subsec. (d) generally. Prior to amendment, text read as follows:

''(1) Prohibition. - Except with the prior written consent of the

Board -

''(A) any person who has been convicted of any criminal offense

involving dishonesty or a breach of trust may not participate,

directly or indirectly, in any manner in the conduct of the

affairs of an insured credit union; and

''(B) an insured credit union may not permit such

participation.

''(2) Penalty. - Whoever knowingly violates paragraph (1) shall

be fined not more than $1,000,000 for each day such prohibition is

violated or imprisoned for not more than 5 years, or both.''

1989 - Subsec. (d). Pub. L. 101-73 amended subsec. (d)

generally. Prior to amendment, subsec. (d) read as follows:

''Except with the written consent of the Board, no person shall

serve as a director, officer, committee member, or employee of an

insured credit union who has been convicted, or who is hereafter

convicted, of any criminal offense involving dishonesty or a breach

of trust. For each willful violation of this prohibition, the

credit union involved shall be subject to a penalty of not more

than $100 for each day this prohibition is violated, which the

Board may recover for its use.''

1987 - Pub. L. 100-86 repealed Pub. L. 97-320, Sec. 141. See 1982

Amendment note below.

1982 - Subsec. (f)(2). Pub. L. 97-320, Sec. 706(b), inserted

provisions relating to deposits of public funds.

Subsecs. (h), (i). Pub. L. 97-320, Sec. 131, added subsecs. (h)

and (i).

Pub. L. 97-320, Sec. 141(a)(8), which directed that, effective

Oct. 13, 1986, the provisions of law amended by section 131 of Pub.

L. 97-320 shall be amended to read as they would without such

amendment, was repealed by Pub. L. 100-86, Sec. 509(a). See

Effective and Termination Dates of 1982 Amendment note and

Extension of Emergency Acquisition and Net Worth Guarantee

Provisions of Pub. L. 97-320 note set out under section 1464 of

this title.

1980 - Subsec. (f). Pub. L. 96-221, Sec. 305(d), added subsec.

(f).

Subsec. (g). Pub. L. 96-221, Sec. 523, added subsec. (g).

1978 - Pub. L. 95-630 substituted ''Board'' for ''Administrator''

wherever appearing, and ''its'' for ''his'' where appropriate.

EFFECTIVE DATE OF 1980 AMENDMENT

Enactment of subsec. (f) by Pub. L. 96-221 effective at the close

of Mar. 31, 1980, see section 306 of Pub. L. 96-221, set out as an

Effective Date of 1980 Amendment note under section 371a of this

title.

Section 525 of Pub. L. 96-221 provided that: ''The amendments

made by sections 521 through 523 of this title (amending this

section and enacting sections 1730g and 1831d of this title) shall

apply only with respect to loans made in any State during the

period beginning on April 1, 1980, and ending on the date, on or

after April 1, 1980, on which such State adopts a law or certifies

that the voters of such State have voted in favor of any provision,

constitutional or otherwise, which states explicitly and by its

terms that such State does not want the amendments made by such

sections to apply with respect to loans made in such State, except

that such amendments shall apply to a loan made on or after the

date such law is adopted or such certification is made if such loan

is made pursuant to a commitment to make such loan which was

entered into on or after April 1, 1980, and prior to the date on

which such law is adopted or such certification is made.''

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, and transitional provisions, see section 509

of Pub. L. 95-630, set out as a note under section 1752 of this

title.

-TRANS-

TRANSFER OF FUNCTIONS

Federal Savings and Loan Insurance Corporation abolished and

functions transferred, see sections 401 to 406 of Pub. L. 101-73,

set out as a note under section 1437 of this title.

-MISC5-

EXTENSION OF EMERGENCY ACQUISITION AND NET WORTH GUARANTEE

PROVISIONS OF PUB. L. 97-320

No amendment made by section 141(a) of Pub. L. 97-320, set out as

a note under section 1464 of this title, as in effect before Aug.

10, 1987, to any other provision of law to be deemed to have taken

effect before such date and any such provision of law to be in

effect as if no such amendment had been made before such date, see

section 509(c) of Pub. L. 100-86, set out as a note under section

1464 of this title.

No amendment made by section 141(a) of Pub. L. 97-320, set out as

a note under section 1464 of this title, as in effect on the day

before Oct. 8, 1986, to any other provision of law to be deemed to

have taken effect before such date and any such provision of law to

be in effect as if no such amendment had taken effect before such

date, see section 1(c) of Pub. L. 99-452, set out as a note under

section 1464 of this title.

Section 141(a) of Pub. L. 97-320, set out as a note under section

1464 of this title, as in effect on the day after Aug. 27, 1986,

applicable as if included in Pub. L. 97-320 on Oct. 15, 1982, with

no amendment made by such section to any other provision of law to

be deemed to have taken effect before Aug. 27, 1986, and any such

provision of law to be in effect as if no such amendment had taken

effect before Aug. 27, 1986, see section 1(c) of Pub. L. 99-400,

set out as a note under section 1464 of this title.

-CROSS-

DEFINITION OF ''STATE''

For purposes of subsec. (g) of this section, the term ''State''

to include the several States, the Commonwealth of Puerto Rico, the

District of Columbia, Guam, the Trust Territories of the Pacific

Islands, the Northern Mariana Islands, and the Virgin Islands, see

section 527 of Pub. L. 96-221, set out as a note under section

1735f-7a of this title.

-MISC7-

CHOICE OF HIGHEST APPLICABLE INTEREST RATE

In any case in which one or more provisions of, or amendments

made by, title V of Pub. L. 96-221, section 1735f-7 of this title,

or any other provisions of law, including section 85 of this title,

apply with respect to the same loan, mortgage, credit sale, or

advance, such loan, mortgage, credit sale, or advance may be made

at the highest applicable rate, see section 528 of Pub. L. 96-221,

set out as a note under section 1735f-7a of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1757 of this title.

-CITE-

12 USC Sec. 1786 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 14 - FEDERAL CREDIT UNIONS

SUBCHAPTER II - SHARE INSURANCE

-HEAD-

Sec. 1786. Termination of insured credit union status; cease and

desist orders; removal or suspension from office; procedure

-STATUTE-

(a) Termination of insurance

(1) Any insured credit union other than a Federal credit union

may, upon not less than ninety days' written notice to the Board

and upon the affirmative vote of a majority of its members within

one year prior to the giving of such notice, terminate its status

as an insured credit union.

(2) Any insured credit union, other than a Federal credit union,

which has obtained a new certificate of insurance from a

corporation authorized and duly licensed to insure member accounts

may upon not less than ninety days' written notice to the Board

convert from status as an insured credit union under this chapter:

Provided, That at the time of giving notice to the Board the

provisions of paragraph (b)(1) of this section are not being

invoked against the credit union.

(b) Unsound condition of credit union; notice to correct condition;

hearing; judicial review

(1) Whenever, in the opinion of the Board, any insured credit

union is engaging or has engaged in unsafe or unsound practices in

conducting the business of such credit union, or is in an unsafe or

unsound condition to continue operations as an insured credit

union, or is violating or has violated an applicable law, rule,

regulation, order, or any condition imposed in writing by the Board

in connection with the granting of any application or other request

by the credit union, or is violating or has violated any written

agreement entered into with the Board, the Board shall serve upon

the credit union a statement with respect to such practices or

conditions or violations for the purpose of securing the correction

thereof. In the case of an insured State-chartered credit union,

the Board shall send a copy of such statement to the commission,

board, or authority, if any, having supervision of such credit

union. Unless such correction shall be made within one hundred and

twenty days after service of such statement, or within such shorter

period of not less than twenty days after such service as the Board

shall require in any case where it determines that the insurance

risk with respect to such credit union could be unduly jeopardized

by further delay in the correction of such practices or conditions

or violations, or as the commission, board, or authority having

supervision of such credit union, if any, shall require in the case

of an insured State-chartered credit union, the Board, if it shall

determine to proceed further, shall give to the credit union not

less than thirty days' written notice of its intention to terminate

the status of the credit union as an insured credit union. Such

notice shall contain a statement of the facts constituting the

alleged unsafe and unsound practices or conditions or violations

and shall fix a time and place for a hearing thereon. Such hearing

shall be fixed for a date not earlier than thirty days nor later

than sixty days after service of such notice unless an earlier or a

later date is set by the Board at the request of the credit union.

Unless the credit union shall appear at the hearing by a duly

authorized representative, it shall be deemed to have consented to

the termination of its status as an insured credit union. In the

event of such consent, or if upon the record made at any such

hearing the Board shall find that any unsafe or unsound practice or

condition or violation specified in the notice has been established

and has not been corrected within the time above-prescribed in

which to make such correction, the Board may issue and serve upon

the credit union an order terminating its status as an insured

credit union on a date subsequent to the date of such finding and

subsequent to the expiration of the time specified in the notice.

(2) Any credit union whose insured status has been terminated by

order of the Board under this subsection shall have the right of

judicial review of such order only to the same extent as provided

for the review of orders under subsection (j) of this section.

(c) Notice to members of termination of insured status

In the event of the termination of a credit union's status as an

insured credit union as provided under subsection (a)(1) or (b) of

this section, the credit union shall give prompt and reasonable

notice to all of its members whose accounts are insured that it has

ceased to be an insured credit union. It may include in such

notice a statement of the fact that member accounts insured on the

effective date of such termination, to the extent not withdrawn,

remain insured for one year from the date of such termination, but

it shall not further represent itself in any manner as an insured

credit union. In the event of failure to give the notice as herein

provided to members whose accounts are insured, the Board is

authorized to give reasonable notice.

(d) Continuation of insurance for one year; approval of conversion

of status; procedure subsequent to approval; reduction of

premium charges

(1) After the termination of the insured status of any credit

union as provided under subsection (a)(1) or (b) of this section,

insurance of its member accounts to the extent that they were

insured on the effective date of such termination, less any amounts

thereafter withdrawn which reduce the accounts below the amount

covered by insurance on the effective date of such termination,

shall continue for a period of one year, but no shares issued by

the credit union or deposits made after the date of such

termination shall be insured by the Board. The credit union shall

continue to maintain its deposit with and pay premiums to the Board

during such period as in the case of an insured credit union and

the Board shall have the right to examine such credit union from

time to time during the period during which such insurance

continues. Such credit union shall, in all other respects, be

subject to the duties and obligations of an insured credit union

for the period of one year from the date of such termination. In

the event that such credit union shall be closed for liquidation

within such period of one year, the Board shall have the same

powers and rights with respect to such credit union as in the case

of an insured credit union. Notwithstanding the above, when an

insured credit union's insured status is terminated and the credit

union subsequently obtains comparable insurance coverage from

another source, insurance of its accounts by the fund may cease

immediately upon the effective date of such comparable coverage by

mutual consent of the credit union and the Board.

(2) No credit union shall convert from status as an insured

credit union under this chapter as provided under subsection (a)(2)

of this section until the proposition for such conversion has been

approved by a majority of all the directors of the credit union,

and by affirmative vote of a majority of the members of the credit

union who vote on the proposition in a vote in which at least 20

per centum of the total membership of the credit union

participates. Following approval by the directors, written notice

of the proposition and of the date set for the membership vote

shall be delivered in person to each member, or mailed to each

member at the address for such member appearing on the records of

the credit union, not more than thirty nor less than seven days

prior to such date. The membership shall be given the opportunity

to vote by mail ballot. If the proposition is approved by the

membership, prompt and reasonable notice of insurance conversion

shall be given to all members.

(3) In the event of a conversion of a credit union from status as

an insured credit union under this chapter as provided under

subsection (a)(2) of this section, premium charges payable under

section 1782(c) of this title shall be reduced by an amount

proportionate to the number of calendar months for which the

converting credit union will no longer be insured under this

chapter. As long as a converting credit union remains insured

under this chapter it shall remain subject to all of the provisions

of this subchapter.

(e) Opinion of Board as to unsound condition of credit union;

notice of charges; hearing; order to cease and desist; judicial

review

(1) If, in the opinion of the Board, any insured credit union,

credit union which has insured accounts, or any

institution-affiliated party is engaging or has engaged, or the

Board has reasonable cause to believe that the credit union or any

institution-affiliated party is about to engage, in an unsafe or

unsound practice in conducting the business of such credit union,

or is violating or has violated, or the Board has reasonable cause

to believe that the credit union or any institution-affiliated

party is about to violate, a law, rule, or regulation, or any

condition imposed in writing by the Board in connection with the

granting of any application or other request by the credit union or

any written agreement entered into with the Board, the Board may

issue and serve upon the credit union or such party a notice of

charges in respect thereof. The notice shall contain a statement

of the facts constituting the alleged violation or violations or

the unsafe or unsound practice or practices, and shall fix a time

and place at which a hearing will be held to determine whether an

order to cease and desist therefrom should issue against the credit

union or the institution-affiliated party. Such hearing shall be

fixed for a date not earlier than thirty days nor later than sixty

days after service of such notice unless an earlier or a later date

is set by the Board at the request of any party so served. Unless

the party or parties so served shall appear at the hearing by a

duly authorized representative, they shall be deemed to have

consented to the issuance of the cease-and-desist order. In the

event of such consent, or if upon the record made at any such

hearing, the Board shall find that any violation or unsafe or

unsound practice specified in the notice of charges has been

established, the Board may issue and serve upon the credit union or

the institution-affiliated party an order to cease and desist from

any such violation or practice. Such order may, by provisions

which may be mandatory or otherwise, require the credit union or

its institution-affiliated parties to cease and desist from the

same, and, further, to take affirmative action to correct the

conditions resulting from any such violation or practice.

(2) A cease-and-desist order shall become effective at the

expiration of thirty days after the service of such order upon the

credit union or other person concerned (except in the case of a

cease-and-desist order issued upon consent, which shall become

effective at the time specified therein), and shall remain

effective and enforceable as provided therein, except to such

extent as it is stayed, modified, terminated, or set aside by

action of the Board or a reviewing court.

(3) Affirmative action to correct conditions resulting from

violations or practices. - The authority to issue an order under

this subsection and subsection (f) of this section which requires

an insured credit union or any institution-affiliated party to take

affirmative action to correct any conditions resulting from any

violation or practice with respect to which such order is issued

includes the authority to require such insured credit union or such

party to -

(A) make restitution or provide reimbursement, indemnification,

or guarantee against loss if -

(i) such credit union or such party was unjustly enriched in

connection with such violation or practice; or

(ii) the violation or practice involved a reckless disregard

for the law or any applicable regulations or prior order of the

Board;

(B) restrict the growth of the institution;

(C) rescind agreements or contracts;

(D) dispose of any loan or asset involved; and

(E) employ qualified officers or employees (who may be subject

to approval by the Board at the direction of such Board); and

(F) take such other action as the Board determines to be

appropriate.

(4) Authority to limit activities. - The authority to issue an

order under this subsection or subsection (f) of this section

includes the authority to place limitations on the activities or

functions of an insured credit union or any institution-affiliated

party.

(f) Temporary cease and desist order; injunctive procedure

(1) Whenever the Board shall determine that the violation or

threatened violation or the unsafe or unsound practice or

practices, specified in the notice of charges served upon the

credit union or any institution-affiliated party pursuant to

paragraph (1) of subsection (e) of this section, or the

continuation thereof, is likely to cause insolvency or significant

dissipation of assets or earnings of the credit union, or is likely

to weaken the condition of the credit union or otherwise prejudice

the interests of its insured members prior to the completion of the

proceedings conducted pursuant to paragraph (1) of subsection (e)

of this section, the Board may issue a temporary order requiring

the credit union or such party to cease and desist from any such

violation or practice and to take affirmative action to prevent

such insolvency, dissipation, condition, or prejudice pending

completion of such proceedings. Such order may include any

requirement authorized under subsection (e)(3)(B) of this section.

Such order shall become effective upon service upon the credit

union or such institution-affiliated party and, unless set aside,

limited, or suspended by a court in proceedings authorized by

paragraph (2) of this subsection, shall remain effective and

enforceable pending the completion of the administrative

proceedings pursuant to such notice and until such time as the

Administration shall dismiss the charges specified in such notice,

or if a cease-and-desist order is issued against the credit union

or such party, until the effective date of such order.

(2) Within ten days after the credit union concerned or any

institution-affiliated party has been served with a temporary

cease-and-desist order, the credit union or such party may apply to

the United States district court for the judicial district in which

the home office of the credit union is located, or the United

States District Court for the District of Columbia, for an

injunction setting aside, limiting, or suspending the enforcement,

operation, or effectiveness of such order pending the completion of

the administrative proceedings pursuant to the notice of charges

served upon the credit union or such party under paragraph (1) of

subsection (e) of this section, and such court shall have

jurisdiction to issue such injunction.

(3) Incomplete or inaccurate records. -

(A) Temporary order. - If a notice of charges served under

subsection (e)(1) of this section specifies, on the basis of

particular facts and circumstances, that an insured credit

union's books and records are so incomplete or inaccurate that

the Board is unable, through the normal supervisory process, to

determine the financial condition of that insured credit union or

the details or purpose of any transaction or transactions that

may have a material effect on the financial condition of that

insured credit union, the Board may issue a temporary order

requiring -

(i) the cessation of any activity or practice which gave

rise, whether in whole or in part, to the incomplete or

inaccurate state of the books or records; or

(ii) affirmative action to restore such books or records to a

complete and accurate state, until the completion of the

proceedings under subsection (e)(1) of this section.

(B) Effective period. - Any temporary order issued under

subparagraph (A) -

(i) shall become effective upon service; and

(ii) unless set aside, limited, or suspended by a court in

proceedings under paragraph (2), shall remain in effect and

enforceable until the earlier of -

(I) the completion of the proceeding initiated under

subsection (e)(1) of this section in connection with the

notice of charges; or

(II) the date the Board determines, by examination or

otherwise, that the insured credit union's books and records

are accurate and reflect the financial condition of the

credit union.

(4) In the case of violation or threatened violation of, or

failure to obey, a temporary cease-and-desist order, the Board may

apply to the United States district court, or the United States

court of any territory, within the jurisdiction of which the

principal office of the credit union is located for an injunction

to enforce such order, and, if the court shall determine that there

has been such violation or threatened violation or failure to obey,

it shall be the duty of the court to issue such injunction.

(g) Removal and prohibition authority

(1) Authority to issue order. - Whenever the Board determines

that -

(A) any institution-affiliated party has, directly or

indirectly -

(i) violated -

(I) any law or regulation;

(II) any cease-and-desist order which has become final;

(III) any condition imposed in writing by the Board in

connection with the grant of any application or other request

by such credit union; or

(IV) any written agreement between such credit union and

the Board;

(ii) engaged or participated in any unsafe or unsound

practice in connection with any insured credit union or

business institution; or

(iii) committed or engaged in any act, omission, or practice

which constitutes a breach of such party's fiduciary duty;

(B) by reason of the violation, practice, or breach described

in any clause of subparagraph (A) -

(i) such insured credit union or business institution has

suffered or will probably suffer financial loss or other

damage;

(ii) the interests of the insured credit union's members have

been or could be prejudiced; or

(iii) such party has received financial gain or other benefit

by reason of such violation, practice or breach; and

(C) such violation, practice, or breach -

(i) involves personal dishonesty on the part of such party;

or

(ii) demonstrates such party's unfitness to serve as a

director or officer of, or to otherwise participate in the

conduct of the affairs of, an insured credit union,

the Board may serve upon such party a written notice of the Board's

intention to remove such party from office or to prohibit any

further participation, by such party, in any manner in the conduct

of the affairs of any insured credit union.

(2) Specific violations. -

(A) In general. - Whenever the Board determines that -

(i) an institution-affiliated party has committed a violation

of any provision of subchapter II of chapter 53 of title 31,

unless such violation was inadvertent or unintentional;

(ii) an officer or director of an insured credit union has

knowledge that an institution-affiliated party of the insured

credit union has violated any such provision or any provision

of law referred to in subsection (i)(1)(A)(ii) of this section;

or

(iii) an officer or director of an insured credit union has

committed any violation of the Depository Institution

Management Interlocks Act (12 U.S.C. 3201 et seq.),

the Board may serve upon such party, officer, or director a

written notice of the Board's intention to remove such officer or

director from office.

(B) Factors to be considered. - In determining whether an

officer or director should be removed as a result of the

application of subparagraph (A)(ii), the Board shall consider

whether the officer or director took appropriate action to stop,

or to prevent the recurrence of, a violation described in such

subparagraph.

(3) Suspension order. -

(A) Suspension or prohibition authorized. - If the Board serves

written notice under paragraph (1) or (2) to any

institution-affiliated party of the Board's intention to issue an

order under such paragraph, the Board may suspend such party from

office or prohibit such party from further participation in any

manner in the conduct of the affairs of the institution, if the

Board -

(i) determines that such action is necessary for the

protection of the credit union or the interests of the credit

union's members; and

(ii) serves such person with written notice of the suspension

order.

(B) Effective period. - Any suspension order issued under

subparagraph (A) -

(i) shall become effective upon service; and

(ii) unless a court issues a stay of such order under

paragraph (6), shall remain in effect and enforceable until -

(I) the date the Board dismisses the charges contained in

the notice served under paragraph (1) or (2) with respect to

such party; or

(II) the effective date of an order issued by the Board to

such person under paragraph (1) or (2).

(C) Copy of order. - If the Board issues a suspension order

under subparagraph (A) to any institution-affiliated party, the

Board shall serve a copy of such order on any insured credit

union with which such party is associated at the time such order

is issued.

(4) A notice of intention to remove a director, committee member,

officer, or other person from office or to prohibit his

participation in the conduct of the affairs of an insured credit

union, shall contain a statement of the facts constituting grounds

therefor, and shall fix a time and place at which a hearing will be

held thereon. Such hearing shall be fixed for a date not earlier

than thirty days nor later than sixty days after the date of

service of such notice, unless an earlier or a later date is set by

the Board at the request of (A) such director, committee member, or

officer or other person, and for good cause shown, or (B) the

Attorney General of the United States. Unless such director,

committee member, officer, or other person shall appear at the

hearing in person or by a duly authorized representative, he shall

be deemed to have consented to the issuance of an order of such

removal or prohibition. In the event of such consent, or if upon

the record made at any such hearing the Board shall find that any

of the grounds specified in such notice have been established, the

Board may issue such orders of suspension or removal from office,

or prohibition from participation in the conduct of the affairs of

the credit union, as it may deem appropriate. Any such order shall

become effective at the expiration of thirty days after service

upon such credit union and the director, committee member, officer,

or other person concerned (except in the case of an order issued

upon consent, which shall become effective at the time specified

therein). Such order shall remain effective and enforceable except

to such extent as it is stayed, modified, terminated, or set aside

by action of the Board or a reviewing court.

(5) Prohibition of certain specific activities. - Any person

subject to an order issued under this subsection shall not -

(A) participate in any manner in the conduct of the affairs of

any institution or agency specified in paragraph (7)(A);

(B) solicit, procure, transfer, attempt to transfer, vote, or

attempt to vote any proxy, consent, or authorization with respect

to any voting rights in any institution described in subparagraph

(A);

(C) violate any voting agreement previously approved by the

appropriate Federal banking agency; or

(D) vote for a director, or serve or act as an

institution-affiliated party.

(6) Within ten days after any director, officer, committee

member, or other person has been suspended from office and/or

prohibited from participation in the conduct of the affairs of an

insured credit union under paragraph (3) of this subsection, such

director, officer, committee member, or other person may apply to

the United States district court for the judicial district in which

the principal office of the credit union is located, or the United

States District Court for the District of Columbia, for a stay of

such suspension and/or prohibition pending the completion of the

administrative proceedings pursuant to the notice served upon such

director, officer, committee member, or other person under

paragraph (1) or (2) of this subsection, and such court shall have

jurisdiction to stay such suspension and/or prohibition.

(7) Industrywide Prohibition. -

(A) In general. - Except as provided in subparagraph (B), any

person who, pursuant to an order issued under this subsection or

subsection (i) of this section, has been removed or suspended

from office in an insured credit union or prohibited from

participating in the conduct of the affairs of an insured credit

union may not, while such order is in effect, continue or

commence to hold any office in, or participate in any manner in

the conduct of the affairs of -

(i) any insured depository institution;

(ii) any institution treated as an insured bank under

paragraph (3) or (4) of section 1818(b) of this title, or as a

savings association under section 1818(b)(8) (FOOTNOTE 1) of

this title;

(FOOTNOTE 1) See References in Text note below.

(iii) any insured credit union;

(iv) any institution chartered under the Farm Credit Act of

1971 (12 U.S.C. 2001 et seq.);

(v) any appropriate Federal depository institution regulatory

agency;

(vi) the Federal Housing Finance Board and any Federal home

loan bank; and

(vii) the Resolution Trust Corporation.

(B) Exception if agency provides written consent. - If, on or

after the date an order is issued under this subsection which

removes or suspends from office any institution-affiliated party

or prohibits such party from participating in the conduct of the

affairs of an insured credit union, such party receives the

written consent of -

(i) the Board; and

(ii) the appropriate Federal financial institutions

regulatory agency of the institution described in any clause of

subparagraph (A) with respect to which such party proposes to

become an institution-affiliated party,

subparagraph (A) shall, to the extent of such consent, cease to

apply to such party with respect to the institution described in

each written consent. If any person receives such a written

consent from the Board, the Board shall publicly disclose such

consent. If the agency referred to in clause (ii) grants such a

written consent, such agency shall report such action to the

Board and publicly disclose such consent.

(C) Violation of paragraph treated as violation of order. - Any

violation of subparagraph (A) by any person who is subject to an

order described in such subparagraph shall be treated as a

violation of the order.

(D) ''Appropriate federal financial institutions regulatory

agency'' defined. - For purposes of this paragraph and subsection

(1), (FOOTNOTE 2) the term ''appropriate Federal financial

institutions regulatory agency'' means -

(FOOTNOTE 2) So in original. No subsection (1) has been

enacted.

(i) the appropriate Federal banking agency, as provided in

section 1813(q) of this title;

(ii) the Farm Credit Administration, in the case of an

institution chartered under the Farm Credit Act of 1971 (12

U.S.C. 2001 et seq.);

(iii) the National Credit Union Administration Board, in the

case of an insured credit union (as defined in section 1752(7)

of this title);

(iv) the Secretary of the Treasury, in the case of the

Federal Housing Finance Board and any Federal home loan bank;

and

(v) the Thrift Depositor Protection Oversight Board, in the

case of the Resolution Trust Corporation.

(E) Consultation between agencies. - The agencies referred to

in clauses (i) and (ii) of subparagraph (B) shall consult with

each other before providing any written consent described in

subparagraph (B).

(F) Applicability. - This paragraph shall only apply to a

person who is an individual, unless the Board specifically finds

that it should apply to a corporation, firm, or other business

enterprise.

(h) Board's appointment of conservator; consultation with State;

authority

(1) The Board may, ex parte without notice, appoint itself or

another (including, in the case of a State-chartered insured credit

union, the State official having jurisdiction over the credit

union) as conservator and immediately take possession and control

of the business and assets of any insured credit union in any case

in which -

(A) the Board determines that such action is necessary to

conserve the assets of any insured credit union or to protect the

Fund or the interests of the members of such insured credit

union;

(B) an insured credit union, by a resolution of its board of

directors, consents to such an action by the Board;

(C) the Attorney General notifies the Board in writing that an

insured credit union has been found guilty of a criminal offense

under section 1956 or 1957 of title 18 or section 5322 or 5324 of

title 31;

(D) there is a willful violation of a cease-and-desist order

which has become final;

(E) there is concealment of books, papers, records, or assets

of the credit union or refusal to submit books, papers, records,

or affairs of the credit union for inspection to any examiner or

to any lawful agent of the Board;

(F) the credit union is significantly undercapitalized, as

defined in section 1790d of this title, and has no reasonable

prospect of becoming adequately capitalized, as defined in

section 1790d of this title; or

(G) the credit union is critically undercapitalized, as defined

in section 1790d of this title.

(2)(A) Except as provided in subparagraph (C), in the case of a

State-chartered insured credit union, the authority conferred by

paragraph (1) shall not be exercised without the written approval

of the State official having jurisdiction over the State-chartered

credit union that the grounds specified for such exercise exist.

(B) If such approval has not been received by the Board within 30

days of receipt of notice by the State that the Board has

determined such grounds exist, and the Board has responded in

writing to the State's written reasons, if any, for withholding

approval, then the Board may proceed without State approval only by

a unanimous vote of the Board.

(C) In the case of a State-chartered insured credit union, the

authority conferred by subparagraphs (F) and (G) of paragraph (1)

may not be exercised unless the Board has complied with section

1790d(l) of this title.

(3) Not later than ten days after the date on which the Board

takes possession and control of the business and assets of an

insured credit union pursuant to paragraph (1), such insured credit

union may apply to the United States district court for the

judicial district in which the principal office of such insured

credit union is located or the United States District Court for the

District of Columbia, for an order requiring the Board to show

cause why it should not be enjoined from continuing such possession

and control. Except as provided in this paragraph, no court may

take any action, except at the request of the Board by regulation

or order, to restrain or affect the exercise of powers or functions

of the Board as conservator.

(4) Except as provided in paragraph (3), in the case of a Federal

credit union, the Board may maintain possession and control of the

business and assets of such credit union and may operate such

credit union until such time -

(A) as the Board shall permit such credit union to continue

business subject to such terms and conditions as may be imposed

by the Board; or

(B) as such credit union is liquidated in accordance with the

provisions of section 1787 of this title.

(5) Except as provided in paragraph (3), in the case of an

insured State-chartered credit union, the Board may maintain

possession and control of the business and assets of such credit

union and may operate such credit union until such time -

(A) as the Board shall permit such credit union to continue

business, subject to such terms and conditions as may be imposed

by the Board;

(B) as the Board shall permit the transfer of possession and

control of such credit union to any commission, board, or

authority which has supervisory authority over such credit union

and which is authorized by State law to operate such credit

union; or

(C) as such credit union is liquidated in accordance with the

provisions of section 1787 of this title.

(6) The Board may appoint such agents as it considers necessary

in order to assist the Board in carrying out its duties as a

conservator under this subsection.

(7) All expenses incurred by the Board in exercising its

authority under this subsection with respect to any credit union

shall be paid out of the assets of such credit union.

(8) The conservator shall have all the powers of the members, the

directors, the officers, and the committees of the credit union and

shall be authorized to operate the credit union in its own name or

to conserve its assets in the manner and to the extent authorized

by the Board.

(9) The authority granted by this subsection is in addition to

all other authority granted to the Board under this chapter.

(i) Suspension or removal of institution-affiliated party charged

with crime

(1) Suspension or prohibition authorized. -

(A) In general. - Whenever any institution-affiliated party is

charged in any information, indictment, or complaint, with the

commission of or participation in -

(i) a crime involving dishonesty or breach of trust which is

punishable by imprisonment for a term exceeding one year under

State or Federal law, or

(ii) a criminal violation of section 1956, 1957, or 1960 of

title 18 or section 5322 or 5324 of title 31,

the Board may, if continued service or participation by such

party may pose a threat to the interests of the credit union's

members or may threaten to impair public confidence in the credit

union, by written notice served upon such party, suspend such

party from office or prohibit such party from further

participation in any manner in the conduct of the affairs of the

credit union.

(B) Provisions applicable to notice. -

(i) Copy. - A copy of any notice under subparagraph (A) shall

also be served upon the credit union.

(ii) Effective period. - A suspension or prohibition under

subparagraph (A) shall remain in effect until the information,

indictment, or complaint referred to in such subparagraph is

finally disposed of or until terminated by the Board.

(C) Removal or prohibition. -

(i) In general. - If a judgment of conviction or an agreement

to enter a pretrial diversion or other similar program is

entered against an institution-affiliated party in connection

with a crime described in subparagraph (A)(i), at such time as

such judgment is not subject to further appellate review, the

Board may, if continued service or participation by such party

may pose a threat to the interests of the credit union's

members or may threaten to impair public confidence in the

credit union, issue and serve upon such party an order removing

such party from office or prohibiting such party from further

participation in any manner in the conduct of the affairs of

the credit union without the prior written consent of the

Board.

(ii) Required for certain offenses - In the case of a

judgment of conviction or agreement against an

institution-affiliated party in connection with a violation

described in subparagraph (A)(ii), the Board shall issue and

serve upon such party an order removing such party from office

or prohibiting such party from further participation in any

manner in the conduct of the affairs of the credit union

without the prior written consent of the Board.

(D) Provisions applicable to order. -

(i) Copy. - A copy of any order under subparagraph (C) shall

also be served upon such credit union, whereupon such party (if

a director or an officer) shall cease to be a director or

officer of such credit union.

(ii) Effect of acquittal. - A finding of not guilty or other

disposition of the charge shall not preclude the Board from

instituting proceedings after such finding or disposition to

remove such party from office or to prohibit further

participation in credit union affairs, pursuant to paragraph

(1), (2), or (3) of subsection (g) of this section.

(iii) Effective period. - Any notice of suspension or order

of removal issued under this paragraph shall remain effective

and outstanding until the completion of any hearing or appeal

authorized under paragraph (3) unless terminated by the Board.

(2) If at any time, because of the suspension of one or more

directors pursuant to this section, there shall be on the board of

directors of a Federal credit union less than a quorum of directors

not so suspended, all powers and functions vested in or exercisable

by such board shall vest in and be exercisable by the director or

directors on the board not so suspended, until such time as there

shall be a quorum of the board of directors. In the event all of

the directors of a Federal credit union are suspended pursuant to

this section, the Board shall appoint persons to serve temporarily

as directors in their place and stead pending the termination of

such suspensions, or until such time as those who have been

suspended cease to be directors of the credit union and their

respective successors have been elected by the members at an annual

or special meeting and have taken office. Directors appointed

temporarily by the Board shall, within thirty days following their

appointment, call a special meeting for the election of new

directors, unless during the thirty-day period (A) the regular

annual meeting is scheduled, or (B) the suspensions giving rise to

the appointment of temporary directors are terminated.

(3) Within thirty days from service of any notice of suspension

or order of removal issued pursuant to paragraph (1) of this

subsection, the institution-affiliated party concerned may request

in writing an opportunity to appear before the Board to show that

the continued service to or participation in the conduct of the

affairs of the credit union by such party does not, or is not

likely to, pose a threat to the interests of the credit union's

members or threaten to impair public confidence in the credit

union. Upon receipt of any such request, the Board shall fix a

time (not more than thirty days after receipt of such request,

unless extended at the request of such party) and place at which

such party may appear, personally or through counsel, before the

Board or its designee to submit written materials (or, at the

discretion of the Board, oral testimony) and oral argument. Within

sixty days of such hearing, the Board shall notify such party

whether the suspension or prohibition from participation in any

manner in the conduct of the affairs of the credit union will be

continued, terminated or otherwise modified, or whether the order

removing such party from office or prohibiting such party from

further participation in any manner in the conduct of the affairs

of the credit union will be rescinded or otherwise modified. Such

notification shall contain a statement of the basis for the Board's

decision, if adverse to such party. The Board is authorized to

prescribe such rules as may be necessary to effectuate the purposes

of this subsection.

(j) Jurisdiction of hearing; procedure; judicial review

(1) Any hearing provided for in this section (other than the

hearing provided for in subsection (i)(3) of this section) shall be

held in the Federal judicial district or in the territory in which

the principal office of the credit union is located, unless the

party afforded the hearing consents to another place, and shall be

conducted in accordance with the provisions of chapter 5 of title

5. After such hearing, and within ninety days after the Board has

notified the parties that the case has been submitted to it for

final decision, it shall render its decision (which shall include

findings of fact upon which its decision is predicated) and shall

issue and serve upon each party to the proceeding an order or

orders consistent with the provisions of this section. Judicial

review of any such order shall be exclusively as provided in this

subsection (j). Unless a petition for review is timely filed in a

court of appeals of the United States, as provided in paragraph (2)

of this subsection, and thereafter until the record in the

proceeding has been filed as so provided, the Board may at any

time, upon such notice and in such manner as it may deem proper,

modify, terminate, or set aside any such order. Upon such filing

of the record, the Board may modify, terminate, or set aside any

such order with permission of the court.

(2) Any party to any proceeding under paragraph (1) may obtain a

review of any order served pursuant to paragraph (1) of this

subsection (other than an order issued with the consent of the

credit union or the institution-affiliated party concerned or an

order issued under subsection (i)(1) of this section) by filing in

the court of appeals of the United States for the circuit in which

the principal office of the credit union is located, or in the

United States Court of Appeals for the District of Columbia

Circuit, within thirty days after the date of service of such

order, a written petition praying that the order of the Board be

modified, terminated, or set aside. A copy of such petition shall

be forthwith transmitted by the clerk of the court to the Board,

and thereupon the Board shall file in the court the record in the

proceeding, as provided in section 2112 of title 28. Upon the

filing of such petition, such court shall have jurisdiction, which

upon the filing of the record shall, except as provided in the last

sentence of said paragraph (1), be exclusive, to affirm, modify,

terminate, or set aside, in whole or in part, the order of the

Board. Review of such proceedings shall be had as provided in

chapter 7 of title 5. The judgment and decree of the court shall be

final, except that the same shall be subject to review by the

Supreme Court upon certiorari, as provided in section 1254 of title

28.

(3) The commencement of proceedings for judicial review under

paragraph (2) of this subsection shall not, unless specifically

ordered by the court, operate as a stay of any order issued by the

Board.

(k) Jurisdiction and enforcement; penalty

(1) The Board may in its discretion apply to the United States

district court, or the United States court of any territory within

the jurisdiction of which the principal office of the credit union

is located, for the enforcement of any effective and outstanding

notice or order issued under this section or section 1790d of this

title, and such courts shall have jurisdiction and power to order

and require compliance therewith. However, except as otherwise

provided in this section or section 1790d of this title, no court

shall have jurisdiction to affect by injunction or otherwise the

issuance or enforcement of any notice or order under this section

or section 1790d of this title or to review, modify, suspend,

terminate, or set aside any such notice or order.

(2) Civil money penalty. -

(A) First tier. - Any insured credit union which, and any

institution-affiliated party who -

(i) violates any law or regulation;

(ii) violates any final order or temporary order issued

pursuant to subsection (e), (f), (g), (i), or (q) of this

section, or any final order under section 1790d of this title;

(iii) violates any condition imposed in writing by the Board

in connection with the grant of any application or other

request by such credit union; or

(iv) violates any written agreement between such credit union

and such agency,

shall forfeit and pay a civil penalty of not more than $5,000 for

each day during which such violation continues.

(B) Second tier. - Notwithstanding subparagraph (A), any

insured credit union which, and any institution-affiliated party

who -

(i)(I) commits any violation described in any clause of

subparagraph (A);

(II) recklessly engages in an unsafe or unsound practice in

conducting the affairs of such credit union; or

(III) breaches any fiduciary duty;

(ii) which violation, practice, or breach -

(I) is part of a pattern of misconduct;

(II) causes or is likely to cause more than a minimal loss

to such credit union; or

(III) results in pecuniary gain or other benefit to such

party,

shall forfeit and pay a civil penalty of not more than $25,000

for each day during which such violation, practice, or breach

continues.

(C) Third tier. - Notwithstanding subparagraphs (A) and (B),

any insured credit union which, and any institution-affiliated

party who -

(i) knowingly -

(I) commits any violation described in any clause of

subparagraph (A);

(II) engages in any unsafe or unsound practice in

conducting the affairs of such credit union; or

(III) breaches any fiduciary duty; and

(ii) knowingly or recklessly causes a substantial loss to

such credit union or a substantial pecuniary gain or other

benefit to such party by reason of such violation, practice, or

breach,

shall forfeit and pay a civil penalty in an amount not to exceed

the applicable maximum amount determined under subparagraph (D)

for each day during which such violation, practice, or breach

continues.

(D) Maximum amounts of penalties for any violation described in

subparagraph (c). - The maximum daily amount of any civil penalty

which may be assessed pursuant to subparagraph (C) for any

violation, practice, or breach described in such subparagraph is

-

(i) in the case of any person other than an insured credit

union, an amount to not (FOOTNOTE 3) exceed $1,000,000; and

(FOOTNOTE 3) So in original. Probably should be ''not to''.

(ii) in the case of any insured credit union, an amount not

to exceed the lesser of -

(I) $1,000,000; or

(II) 1 percent of the total assets of such credit union.

(E) Assessment. -

(i) Written notice. - Any penalty imposed under subparagraph

(A), (B), or (C) may be assessed and collected by the Board by

written notice.

(ii) Finality of assessment. - If, with respect to any

assessment under clause (i), a hearing is not requested

pursuant to subparagraph (H) within the period of time allowed

under such subparagraph, the assessment shall constitute a

final and unappealable order.

(F) Authority to modify or remit penalty. - The Board may

compromise, modify, or remit any penalty which such agency may

assess or had already assessed under subparagraph (A), (B), or

(C).

(G) Mitigating factors. - In determining the amount of any

penalty imposed under subparagraph (A), (B), or (C), the Board

shall take into account the appropriateness of the penalty with

respect to -

(i) the size of financial resources and good faith of the

insured credit union or the person charged;

(ii) the gravity of the violation;

(iii) the history of previous violations; and

(iv) such other matters as justice may require.

(H) Hearing. - The insured credit union or other person against

whom any penalty is assessed under this paragraph shall be

afforded an agency hearing if such institution or person submits

a request for such hearing within 20 days after the issuance of

the notice of assessment.

(I) Collection. -

(i) Referral. - If any insured credit union or other person

fails to pay an assessment after any penalty assessed under

this paragraph has become final, the Board shall recover the

amount assessed by action in the appropriate United States

district court.

(ii) Appropriateness of penalty not reviewable. - In any

civil action under clause (i), the validity and appropriateness

of the penalty shall not be subject to review.

(J) Disbursement. - All penalties collected under authority of

this paragraph shall be deposited into the Treasury.

(K) ''Violate'' defined. - For purposes of this section, the

term ''violate'' includes any action (alone or with another or

others) for or toward causing, bringing about, participating in,

counseling, or aiding or abetting a violation.

(L) Regulations. - The Board shall prescribe regulations

establishing such procedures as may be necessary to carry out

this paragraph.

(3) Notice under this section after separation from service. -

The resignation, termination of employment or participation, or

separation of a institution-affiliated party (including a

separation caused by the closing of an insured credit union) shall

not affect the jurisdiction and authority of the Board to issue any

notice and proceed under this section against any such party, if

such notice is served before the end of the 6-year period beginning

on the date such party ceased to be such a party with respect to

such credit union (whether such date occurs before, on, or after

August 9, 1989).

(l) Criminal penalty for violation of certain orders

Whoever -

(1) under this chapter, is suspended or removed from, or

prohibited from participating in the affairs of any credit union

described in subsection (g)(5) of this section; and

(2) knowingly participates, directly or indirectly, in any

manner (including by engaging in an activity specifically

prohibited in such an order or in subsection (g)(5) of this

section) in the conduct of the affairs of such a credit union;

shall be fined not more than $1,000,000, imprisoned for not more

than 5 years, or both.

(m) Definitions

As used in this section (1) the terms ''cease-and-desist order

which has become final'' and ''order which has become final'' means

a cease-and-desist order, or an order issued by the Board with the

consent of the credit union or the director, officer, committee

member, or other person concerned, or with respect to which no

petition for review of the action of the Board has been filed and

perfected in a court of appeals as specified in paragraph (2) of

subsection (j) of this section, or with respect to which the action

of the court in which said petition is so filed is not subject to

further review by the Supreme Court of the United States in

proceedings provided for in said paragraph, or an order issued

under subsection (i) of this section, and (2) the term

''violation'' includes, without limitation any action (alone or

with another or others) for or toward causing, bringing about,

participating in, counseling, or aiding or abetting a violation.

(n) Notice or order to State board supervising State-chartered

credit union

Any service required or authorized to be made by the Board under

this section may be made by registered mail or in such other manner

reasonably calculated to give actual notice as the Board may by

regulation or otherwise provide. Copies of any notice or order

served by the Board upon any State-chartered credit union or any

director, officer, or committee member thereof or other person

participating in the conduct of its affairs, pursuant to the

provisions of this section, shall also be sent to the commission,

board, or authority, if any, having supervision of such credit

union.

(o) Notice of proceedings to State board supervising

State-chartered credit union; effect of corrective action by

State board; attack on validity of notice or order

In connection with any proceeding under subsection (e), (f)(1),

or (g) of this section involving an insured State-chartered credit

union or any institution-affiliated party, the Board shall provide

the commission, board, or authority, if any, having supervision of

such credit union, with notice of its intent to institute such a

proceeding and the grounds thereof. Unless within such time as the

Board deems appropriate in the light of the circumstances of the

case (which time must be specified in the notice prescribed in the

preceding sentence) satisfactory corrective action is effectuated

by action of such commission, board, or authority, the Board may

proceed as provided in this section. No credit union or other

party who is the subject of any notice or order issued by the Board

under this section shall have standing to raise the requirements of

this subsection as ground for attacking the validity of any such

notice or order.

(p) Proceedings; powers of Board; court enforcement of subpenas;

witness fees; expenses and attorneys' fees

In the course of or in connection with any proceeding under this

section or in connection with any claim for insured deposits or any

examination or investigation under section 1784(b) of this title,

the Board, in conducting the proceeding, examination, or

investigation or considering the claim for insured deposits,,

(FOOTNOTE 4) or any designated representative thereof, including

any person designated to conduct any hearing under this section,

shall have the power to administer oaths and affirmations, to take

or cause to be taken depositions, and to issue, revoke, quash, or

modify subpenas and subpenas duces tecum, and the Board is

empowered to make rules and regulations with respect to any such

proceedings, claims, examinations, or investigations. The

attendance of witnesses and the production of documents provided

for in this subsection may be required from any place in any State

or in any territory or other place subject to the jurisdiction of

the United States at any designated place where such proceeding is

being conducted. Any party to proceedings under this section may

apply to the United States District Court for the District of

Columbia, or the United States district court for the judicial

district or the United States court in any territory in which such

proceeding is being conducted, or where the witness resides or

carries on business, for enforcement of any subpena or subpena

duces tecum issued pursuant to this subsection, and such courts

shall have jurisdiction and power to order and require compliance

therewith. Witnesses subpenaed under this section shall be paid

the same fees and mileage that are paid witnesses in the district

courts of the United States. Any court having jurisdiction of any

proceedings instituted under this section by an insured credit

union or a director, officer, or committee member thereof may allow

to any such party such reasonable expenses and attorneys' fees as

it deems just and proper, and such expenses and fees shall be paid

by the credit union or from its assets.

(FOOTNOTE 4) So in original.

(q) Compliance with monetary transaction recordkeeping and report

requirements

(1) Compliance procedures required

The Board shall prescribe regulations requiring insured credit

unions to establish and maintain procedures reasonably designed

to assure and monitor the compliance of such credit unions with

the requirements of subchapter II of chapter 53 of title 31.

(2) Examinations of credit unions to include review of compliance

procedures

(A) In general

Each examination of an insured credit union by the Board

shall include a review of the procedures required to be

established and maintained under paragraph (1).

(B) Exam report requirement

The report of examination shall describe any problem with the

procedures maintained by the credit union.

(3) Order to comply with requirements

If the Board determines that an insured credit union -

(A) has failed to establish and maintain the procedures

described in paragraph (1); or

(B) has failed to correct any problem with the procedures

maintained by such credit union which was previously reported

to the credit union by the Board,

the Board shall issue an order in the manner prescribed in

subsection (e) or (f) of this section requiring such credit union

to cease and desist from its violation of this subsection or

regulations prescribed under this subsection.

(r) ''Institution-affiliated party'' defined

For purposes of this chapter, the term ''institution-affiliated

party'' means -

(1) any committee member, director, officer, or employee of, or

agent for, an insured credit union;

(2) any consultant, joint venture partner, and any other person

as determined by the Board (by regulation or on a case-by-case

basis) who participates in the conduct of the affairs of an

insured credit union; and

(3) any independent contractor (including any attorney,

appraiser, or accountant) who knowingly or recklessly

participates in -

(A) any violation of any law or regulation;

(B) any breach of fiduciary duty; or

(C) any unsafe or unsound practice,

which caused or is likely to cause more than a minimal financial

loss to, or a significant adverse effect on, the insured credit

union.

(s) Public disclosure of agency action

(1) In general

The Board shall publish and make available to the public on a

monthly basis -

(A) any written agreement or other written statement for

which a violation may be enforced by the Board, unless the

Board, in its discretion, determines that publication would be

contrary to the public interest;

(B) any final order issued with respect to any administrative

enforcement proceeding initiated by the Board under this

section or any other law; and

(C) any modification to or termination of any order or

agreement made public pursuant to this paragraph.

(2) Hearings

All hearings on the record with respect to any notice of

charges issued by the Board shall be open to the public, unless

the agency, in its discretion, determines that holding an open

hearing would be contrary to the public interest.

(3) Reports to Congress

A written report shall be made part of a determination not to

hold a public hearing pursuant to paragraph (2) or not to publish

a document pursuant to paragraph (1)(A). At the end of each

calendar quarter, all such reports shall be transmitted to the

Congress.

(4) Transcript of hearing

A transcript that includes all testimony and other documentary

evidence shall be prepared for all hearings commenced pursuant to

subsection (k) of this section. A transcript of public hearings

shall be made available to the public pursuant to section 552 of

title 5.

(5) Delay of publication under exceptional circumstances

If the Board makes a determination in writing that the

publication of a final order pursuant to paragraph (1)(B) would

seriously threaten the safety and soundness of an insured

depository institution, the agency may delay the publication of

the document for a reasonable time.

(6) Documents filed under seal in public enforcement hearings

The Board may file any document or part of a document under

seal in any administrative enforcement hearing commenced by the

agency if disclosure of the document would be contrary to the

public interest. A written report shall be made part of any

determination to withhold any part of a document from the

transcript of the hearing required by paragraph (2).

(7) Retention of documents

The Board shall keep and maintain a record, for a period of at

least 6 years, of all documents described in paragraph (1) and

all informal enforcement agreements and other supervisory actions

and supporting documents issued with respect to or in connection

with any administrative enforcement proceeding initiated by such

agency under this section or any other laws.

(8) Disclosures to Congress

No provision of this subsection may be construed to authorize

the withholding, or to prohibit the disclosure, of any

information to the Congress or any committee or subcommittee of

the Congress.

(t) Regulation of certain forms of benefits to

institution-affiliated parties

(1) Golden parachutes and indemnification payments

The Board may prohibit or limit, by regulation or order, any

golden parachute payment or indemnification payment.

(2) Factors to be taken into account

The Board shall prescribe, by regulation, the factors to be

considered by the Board in taking any action pursuant to

paragraph (1) which may include such factors as the following:

(A) Whether there is a reasonable basis to believe that the

institution-affiliated party has committed any fraudulent act

or omission, breach of trust or fiduciary duty, or insider

abuse with regard to the credit union that has had a material

affect on the financial condition of the credit union.

(B) Whether there is a reasonable basis to believe that the

institution-affiliated party is substantially responsible for

the insolvency of the credit union, the appointment of a

conservator or liquidating agent for the credit union, or the

credit union's troubled condition (as defined in prescribed

(FOOTNOTE 5) by the Board pursuant to paragraph

(4)(A)(ii)(III)).

(FOOTNOTE 5) So in original. Probably should be ''regulations

prescribed''.

(C) Whether there is a reasonable basis to believe that the

institution-affiliated party has materially violated any

applicable Federal or State banking law or regulation that has

had a material affect on the financial condition of the credit

union.

(D) Whether there is a reasonable basis to believe that the

institution-affiliated party has violated or conspired to

violate -

(i) section 215, 656, 657, 1005, 1006, 1007, 1014, 1032, or

1344 of title 18; or

(ii) section 1341 or 1343 of such title affecting a

financial institution.

(E) Whether the institution-affiliated party was in a

position of managerial or fiduciary responsibility.

(F) The length of time the party was affiliated with the

credit union and the degree to which -

(i) the payment reasonably reflects compensation earned

over the period of employment; and

(ii) the compensation involved represents a reasonable

payment for services rendered.

(3) Certain payments prohibited

No credit union may prepay the salary or any liability or legal

expense of any institution-affiliated party if such payment is

made -

(A) in contemplation of the insolvency of such credit union

or after the commission of an act of insolvency; and

(B) with a view to, or has the result of -

(i) preventing the proper application of the assets of the

credit union; or

(ii) preferring one creditor over another.

(4) ''Golden parachute payment'' defined

For purposes of this subsection -

(A) In general

The term ''golden parachute payment'' means any payment (or

any agreement to make any payment) in the nature of

compensation by any credit union for the benefit of any

institution-affiliated party pursuant to an obligation of such

credit union that -

(i) is contingent on the termination of such party's

affiliation with the credit union; and

(ii) is received on or after the date on which -

(I) the credit union is insolvent;

(II) any conservator or liquidating agent is appointed

for such credit union; or (FOOTNOTE 6)

(FOOTNOTE 6) So in original. The word ''or'' probably should

not appear.

(III) the Board determines that the credit union is in a

troubled condition (as defined in regulations which the

Board shall prescribe);

(IV) the credit union has been assigned a composite

rating by the Board of 4 or 5 under the Uniform Financial

Institutions Rating System (as applicable with respect to

credit unions); or

(V) the credit union is subject to a proceeding initiated

by the Board to terminate or suspend deposit insurance for

such credit union.

(B) Certain payments in contemplation of an event

Any payment which would be a golden parachute payment but for

the fact that such payment was made before the date referred to

in subparagraph (A)(ii) shall be treated as a golden parachute

payment if the payment was made in contemplation of the

occurrence of an event described in any subclause of such

subparagraph.

(C) Certain payments not included

The term ''golden parachute payment'' shall not include -

(i) any payment made pursuant to a retirement plan which is

qualified (or is intended to be qualified) under section 401

of title 26 or other nondiscriminatory retirement or

severance benefit plan;

(ii) any payment made pursuant to a bona fide deferred

compensation plan or arrangement which the Board determines,

by regulation or order, to be permissible; or

(iii) any payment made by reason of the death or disability

of an institution-affiliated party.

(5) Other definitions

For purposes of this subsection -

(A) Indemnification payment

Subject to paragraph (6), the term ''indemnification

payment'' means any payment (or any agreement to make any

payment) by any credit union for the benefit of any person who

is or was an institution-affiliated party, to pay or reimburse

such person for any liability or legal expense with regard to

any administrative proceeding or civil action instituted by the

Board which results in a final order under which such person -

(i) is assessed a civil money penalty;

(ii) is removed or prohibited from participating in conduct

of the affairs of the credit union; or

(iii) is required to take any affirmative action described

in subsection (e)(3) of this section with respect to such

credit union.

(B) Liability or legal expense

The term ''liability or legal expense'' means -

(i) any legal or other professional expense incurred in

connection with any claim, proceeding, or action;

(ii) the amount of, and any cost incurred in connection

with, any settlement of any claim, proceeding, or action; and

(iii) the amount of, and any cost incurred in connection

with, any judgment or penalty imposed with respect to any

claim, proceeding, or action.

(C) Payment

The term ''payment'' includes -

(i) any direct or indirect transfer of any funds or any

asset; and

(ii) any segregation of any funds or assets for the purpose

of making, or pursuant to an agreement to make, any payment

after the date on which such funds or assets are segregated,

without regard to whether the obligation to make such payment

is contingent on -

(I) the determination, after such date, of the liability

for the payment of such amount; or

(II) the liquidation, after such date, of the amount of

such payment.

(6) Certain commercial insurance coverage not treated as covered

benefit payment

No provision of this subsection shall be construed as

prohibiting any credit union from purchasing any commercial

insurance policy or fidelity bond, except that, subject to any

requirement described in paragraph (5)(A)(iii), such insurance

policy or bond shall not cover any legal or liability expense of

the credit union which is described in paragraph (5)(A).

(u) Foreign investigations

(1) Requesting assistance from foreign banking authorities

In conducting any investigation, examination, or enforcement

action under this chapter, the Board may -

(A) request the assistance of any foreign banking authority;

and

(B) maintain an office outside the United States.

(2) Providing assistance to foreign banking authorities

(A) In general

The Board may, at the request of any foreign banking

authority, assist such authority if such authority states that

the requesting authority is conducting an investigation to

determine whether any person has violated, is violating, or is

about to violate any law or regulation relating to banking

matters or currency transactions administered or enforced by

the requesting authority.

(B) Investigation by Federal banking agency

The Board may, in the Board's discretion, investigate and

collect information and evidence pertinent to a request for

assistance under subparagraph (A). Any such investigation shall

comply with the laws of the United States and the policies and

procedures of the Board.

(C) Factors to consider

In deciding whether to provide assistance under this

paragraph, the Board shall consider -

(i) whether the requesting authority has agreed to provide

reciprocal assistance with respect to banking matters within

the jurisdiction of the Board or any appropriate Federal

banking agency; and

(ii) whether compliance with the request would prejudice

the public interest of the United States.

(D) Treatment of foreign banking authority

For purposes of any Federal law or Board regulation relating

to the collection or transfer of information by the Board or

any appropriate Federal banking agency, the foreign banking

authority shall be treated as another appropriate Federal

banking agency.

(3) Rule of construction

Paragraphs (1) and (2) shall not be construed to limit the

authority of the Board or any other Federal agency to provide or

receive assistance or information to or from any foreign

authority with respect to any matter.

(v) Termination of insurance for money laundering or cash

transaction reporting offenses

(1) In general

(A) Conviction of title 18 offenses

(i) Duty to notify

If an insured State credit union has been convicted of any

criminal offense under section 1956 or 1957 of title 18, the

Attorney General shall provide to the Board a written

notification of the conviction and shall include a certified

copy of the order of conviction from the court rendering the

decision.

(ii) Notice of termination

After written notification from the Attorney General to the

Board of such a conviction, the Board shall issue to such

insured credit union a notice of its intention to terminate

the insured status of the insured credit union and schedule a

hearing on the matter, which shall be conducted as a

termination hearing pursuant to subsection (b) of this

section, except that no period for correction shall apply to

a notice issued under this subparagraph.

(B) Conviction of title 31 offenses

If a credit union is convicted of any criminal offense under

section 5322 or 5324 of title 31 after prior written

notification from the Attorney General, the Board may initiate

proceedings to terminate the insured status of such credit

union in the manner described in subparagraph (A).

(C) Notice to State supervisor

The Board shall simultaneously transmit a copy of any notice

under this paragraph to the appropriate State financial

institutions supervisor.

(2) Factors to be considered

In determining whether to terminate insurance under paragraph

(1), the Board shall take into account the following factors:

(A) The extent to which directors, committee members, or

senior executive officers (as defined by the Board in

regulations which the Board shall prescribe) of the credit

union knew of, or were involved in, the commission of the money

laundering offense of which the credit union was found guilty.

(B) The extent to which the offense occurred despite the

existence of policies and procedures within the credit union

which were designed to prevent the occurrence of any such

offense.

(C) The extent to which the credit union has fully cooperated

with law enforcement authorities with respect to the

investigation of the money laundering offense of which the

credit union was found guilty.

(D) The extent to which the credit union has implemented

additional internal controls (since the commission of the

offense of which the credit union was found guilty) to prevent

the occurrence of any other money laundering offense.

(E) The extent to which the interest of the local community

in having adequate deposit and credit services available would

be threatened by the termination of insurance.

(3) Notice to State credit union supervisor and public

When the order to terminate insured status initiated pursuant

to this subsection is final, the Board shall -

(A) notify the commission, board, or authority (if any)

having supervision of the credit union described in paragraph

(1) at least 10 days prior to the effective date of the order

of the termination of the insured status of such credit union;

and

(B) publish notice of the termination of the insured status

of the credit union.

(4) Temporary insurance of previously insured deposits

Upon termination of the insured status of any State credit

union pursuant to paragraph (1), the deposits of such credit

union shall be treated in accordance with subsection (d)(2) of

this section.

(5) Successor liability

This subsection shall not apply to a successor to the interests

of, or a person who acquires, an insured credit union that

violated a provision of law described in paragraph (1), if the

successor succeeds to the interests of the violator, or the

acquisition is made, in good faith and not for purposes of

evading this subsection or regulations prescribed under this

subsection.

-SOURCE-

(June 26, 1934, ch. 750, title II, Sec. 206, as added Pub. L.

91-468, Sec. 1(3), Oct. 19, 1970, 84 Stat. 1003; amended Pub. L.

93-383, title VII, Sec. 728, Aug. 22, 1974, 88 Stat. 720; Pub. L.

95-22, title III, Sec. 307, Apr. 19, 1977, 91 Stat. 52; Pub. L.

95-630, title I, Sec. 107(a)(4), (c)(4), (d)(4), (e)(4), 111(d),

title V, Sec. 502(b), Nov. 10, 1978, 92 Stat. 3652, 3656, 3659,

3663, 3670, 3681; Pub. L. 97-320, title I, Sec. 132, 141(a)(8),

title IV, Sec. 424(a), (d)(9), (e), 427(c), Oct. 15, 1982, 96 Stat.

1487, 1489, 1522, 1523, 1525; Pub. L. 98-369, div. B, title VIII,

Sec. 2812, July 18, 1984, 98 Stat. 1206; Pub. L. 99-570, title I,

Sec. 1359(d), Oct. 27, 1986, 100 Stat. 3207-29; Pub. L. 100-86,

title V, Sec. 509(a), title VII, Sec. 709-713, Aug. 10, 1987, 101

Stat. 635, 653, 654; Pub. L. 101-73, title IX, Sec. 901(a), (b)(2),

902(b), 903(b), 904(b), 905(b), 906(b), 907(b), 908(b), 913(b),

915(b), 920(b), title XII, Sec. 1217(b), Aug. 9, 1989, 103 Stat.

446, 448, 451, 455, 458, 460, 462, 464, 477, 484, 486, 488, 546;

Pub. L. 101-647, title XXV, Sec. 2523(b), 2532(c), 2547(b), Nov.

29, 1990, 104 Stat. 4870, 4881, 4887; Pub. L. 102-233, title III,

Sec. 302(a), Dec. 12, 1991, 105 Stat. 1767; Pub. L. 102-550, title

XV, Sec. 1501(b), 1503(b), 1504(b), Oct. 28, 1992, 106 Stat. 4044,

4050, 4053; Pub. L. 103-325, title IV, Sec. 411(c)(2)(B), Sept. 23,

1994, 108 Stat. 2253; Pub. L. 105-219, title III, Sec. 301(b)(1),

(g)(1), (2), Aug. 7, 1998, 112 Stat. 930, 931.)

-REFTEXT-

REFERENCES IN TEXT

The Depository Institution Management Interlocks Act, referred to

in subsec. (g)(2)(A)(iii), is title II of Pub. L. 95-630, Nov. 10,

1978, 92 Stat. 3672, as amended, which is classified principally to

chapter 33 (Sec. 3201 et seq.) of this title. For complete

classification of this Act to the Code, see Short Title note set

out under section 3201 of this title and Tables.

Section 1818(b)(8) of this title, referred to in subsec.

(g)(7)(A)(ii), was redesignated section 1818(b)(9) by Pub. L.

102-242, title I, Sec. 131(c)(1), Dec. 19, 1991, 105 Stat. 2266.

The Farm Credit Act of 1971, referred to in subsec.

(g)(7)(A)(iv), (D)(ii), is Pub. L. 92-181, Dec. 10, 1971, 85 Stat.

583, as amended, which is classified generally to chapter 23 (Sec.

2001 et seq.) of this title. For complete classification of this

Act to the Code, see Short Title note set out under section 2001 of

this title and Tables.

-MISC2-

AMENDMENTS

1998 - Subsec. (h)(1). Pub. L. 105-219, Sec. 301(g)(2), inserted

''or another (including, in the case of a State-chartered insured

credit union, the State official having jurisdiction over the

credit union)'' after ''appoint itself'' in introductory

provisions.

Subsec. (h)(1)(F), (G). Pub. L. 105-219, Sec. 301(b)(1)(A), added

subpars. (F) and (G).

Subsec. (h)(2)(A). Pub. L. 105-219, Sec. 301(b)(1)(B)(i),

substituted ''Except as provided in subparagraph (C), in the case''

for ''In the case''.

Subsec. (h)(2)(C). Pub. L. 105-219, Sec. 301(b)(1)(B)(ii), added

subpar. (C).

Subsec. (k)(1). Pub. L. 105-219, Sec. 301(g)(1)(A), inserted ''or

section 1790d of this title'' after ''this section'' in three

places.

Subsec. (k)(2)(A)(ii). Pub. L. 105-219, Sec. 301(g)(1)(B),

inserted '', or any final order under section 1790d of this title''

before semicolon at end.

1994 - Subsecs. (h)(1)(C), (i)(1)(A)(ii), (v)(1)(B). Pub. L.

103-325 substituted ''section 5322 or 5324 of title 31'' for

''section 5322 of title 31''.

1992 - Subsec. (g)(2). Pub. L. 102-550, Sec. 1504(b)(1), amended

par. (2) generally. Prior to amendment, par. (2) read as follows:

''Whenever, in the opinion of the Board, any director, officer, or

committee member of an insured credit union has committed any

violation of the Depository Institution Management Interlocks Act,

the Board may serve upon such director, officer, or committee

member a written notice of its intention to remove him from

office.''

Subsec. (h)(1)(C) to (E). Pub. L. 102-550, Sec. 1501(b), added

subpar. (C) and redesignated former subpars. (C) and (D) as (D) and

(E), respectively.

Subsec. (i)(1). Pub. L. 102-550, Sec. 1504(b)(2), amended par.

(1) generally, subdividing existing provisions into subpars. (A) to

(D), and, in subpar. (A), including violations under section 1956,

1957, or 1960 of title 18 or section 5322 of title 31 as reason for

suspension of any violator from further participation in the

affairs of the credit union.

Subsec. (v). Pub. L. 102-550, Sec. 1503(b), added subsec. (v).

1990 - Subsec. (j)(1). Pub. L. 101-647, Sec. 2547(b)(2), which

directed amendment of par. (1) by striking out after first sentence

''Such hearing shall be private, unless the Board, in its

discretion, after fully considering the views of the party afforded

the hearing, determines that a public hearing is necessary to

protect the public interest.'' was executed by striking out ''Such

hearing shall be private unless the Board, in its discretion, after

fully considering the views of the party afforded the hearing,

determines that a public hearing is necessary to protect the public

interest.'' as the probable intent of Congress.

Subsec. (s). Pub. L. 101-647, Sec. 2547(b)(1), amended subsec.

(s) generally. Prior to amendment, subsec. (s) read as follows:

''(1) In general. - The Board shall publish and make available to

the public -

''(A) any final order issued with respect to any administrative

enforcement proceeding initiated by such agency under this

section or any other provision of law; and

''(B) any modification to or termination of any final order

described in subparagraph (A).

''(2) Delay of publication under exceptional circumstances. - If

the Board makes a determination in writing that the publication of

any final order pursuant to paragraph (1) would seriously threaten

the safety or soundness of an insured credit union or other

federally regulated depository institution, the Board may delay the

publication of such order for a reasonable time.''

Subsec. (t). Pub. L. 101-647, Sec. 2523(b), added subsec. (t).

Subsec. (u). Pub. L. 101-647, Sec. 2532(c), added subsec. (u).

1989 - Subsec. (e)(1). Pub. L. 101-73, Sec. 901(b)(2)(A), (B),

substituted references to institution-affiliated parties for

references to directors, officers, committee members, agents, or

other persons participating in the conduct of the affairs of credit

unions.

Subsec. (e)(3), (4). Pub. L. 101-73, Sec. 902(b)(1), added pars.

(3) and (4).

Subsec. (f)(1). Pub. L. 101-73, Sec. 902(b)(2)(B), substituted

''significant'' for ''substantial'', struck out ''seriously''

before ''weaken the condition of'' and before ''prejudice the

interests of'', and inserted after first sentence ''Such order may

include any requirement authorized under subsection (e)(3)(B) of

this section.''

Pub. L. 101-73, Sec. 901(b)(2)(B), (C), substituted references to

institution-affiliated parties for references to directors,

officers, committee members, employees, agents, or other persons

participating in the conduct of the affairs of credit unions.

Subsec. (f)(2). Pub. L. 101-73, Sec. 901(b)(2)(B), substituted

references to institution-affiliated parties for references to

directors, officers, committee members, employees, agents, or other

persons participating in the conduct of the affairs of credit

unions.

Subsec. (f)(3), (4). Pub. L. 101-73, Sec. 902(b)(2)(A), (C),

added par. (3) and redesignated former par. (3) as (4).

Subsec. (g)(1). Pub. L. 101-73, Sec. 903(b)(1), amended par. (1)

generally. Prior to amendment, par. (1) read as follows:

''Whenever, in the opinion of the Board, any director, officer,

committee member, or employee of an insured credit union has

committed any violation of law, rule, or regulation, or of a

cease-and-desist order which has become final, 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

such director, officer, committee member, or employee and the Board

determines that the credit union has suffered or will probably

suffer substantial financial loss or other damage or that the

interests of its insured members could be seriously prejudiced by

reason of such violation or practice or breach of fiduciary duty,

the Board may serve upon such director, officer, committee member,

or employee a written notice of its intention to remove him from

office.''

Subsec. (g)(2). Pub. L. 101-73, Sec. 903(b)(2), redesignated par.

(3) as (2) and struck out former par. (2) which read as follows:

''Whenever, in the opinion of the Board, any director, officer,

committee member, or employee of an insured credit union, by

conduct or practice with respect to another insured 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, committee member, or

employee, and, whenever, in the opinion of the Board, any agent or

other person participating in the conduct of the affairs of an

insured credit union, by conduct or practice with respect to such

credit union or other insured 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 insured credit

union, the Board may serve upon such director, officer, committee

member, employee, agent, or other person a written notice of its

intention to remove him from office and/or to prohibit his further

participation in any manner in the conduct of the affairs of such

credit union.''

Subsec. (g)(3). Pub. L. 101-73, Sec. 903(b)(2), added par. (3).

Former par. (3) redesignated (2).

Subsec. (g)(4). Pub. L. 101-73, Sec. 903(b)(2), redesignated par.

(5) as (4) and struck out former par. (4) which provided for

temporary suspension from office or prohibition from further

participation in credit union activities.

Subsec. (g)(5). Pub. L. 101-73, Sec. 903(b)(2), (3), added par.

(5). Former par. (5) redesignated (4).

Subsec. (g)(6). Pub. L. 101-73, Sec. 903(b)(4), substituted

''credit union under paragraph (3)'' for ''credit union under

paragraph (4)'' and ''person under paragraph (1) or (2)'' for

''person under paragraph (1), (2), or (3)''.

Subsec. (g)(7). Pub. L. 101-73, Sec. 904(b), amended par. (7)

generally, revising and restating as subpars. (A) to (F) provisions

of former subpars. (A) and (B).

Subsec. (h)(3). Pub. L. 101-73, Sec. 1217(b), inserted at end

''Except as provided in this paragraph, no court may take any

action, except at the request of the Board by regulation or order,

to restrain or affect the exercise of powers or functions of the

Board as conservator.''

Subsec. (i)(1). Pub. L. 101-73, Sec. 906(b), struck out

''authorized by a United States attorney'' after ''is charged in

any information, indictment, or complaint'', and substituted ''or

an agreement to enter a pre-trial diversion or other similar

program'' for ''with respect to such crime'' after ''judgment of

conviction''.

Pub. L. 101-73, Sec. 901(b)(2)(D)(i)-(iv), (vi), substituted

references to institution-affiliated parties for references to

directors, committee members, or officers of insured credit unions,

or other persons participating in the conduct of the affairs of

credit unions, and substituted ''whereupon such party (if a

director, a committee member, or an officer)'' for ''whereupon such

director, committee member, or officer''.

Pub. L. 101-73, Sec. 901(b)(2)(D)(v), which directed the

substitution of ''party'' for ''director, officer or other person''

could not be executed because ''director, officer or other person''

does not appear in par. (1).

Subsec. (i)(3). Pub. L. 101-73, Sec. 901(b)(2)(E)(i)-(iv),

substituted references to institution-affiliated parties for

references to directors, committee members, officers, or other

persons.

Pub. L. 101-73, Sec. 901(b)(2)(E)(v), which directed the

substitution of ''such party'' for ''said director, committee

member, officer or other person'' was executed by making the

substitution for ''said director, committee member, officer, or

other person'' after ''whether the order removing'' in third

sentence to reflect the probable intent of Congress.

Subsec. (j)(2). Pub. L. 101-73, Sec. 920(b), substituted ''Any

party to any proceeding under paragraph (1)'' for ''Any party to

the proceeding, or any person required by an order issued under

this section to cease and desist from any of the practices or

violations stated therein,''.

Pub. L. 101-73, Sec. 901(b)(2)(F), substituted

''institution-affiliated party'' for ''director, officer, committee

member, or other person''.

Subsec. (k)(2). Pub. L. 101-73, Sec. 907(b), in amending par. (2)

generally, designated existing provisions as cls. (i) to (iv),

substituted provisions imposing a fine of $5,000 per day for

violation of any law or regulation, a final or temporary order, any

condition imposed in writing, or any written agreement for

provisions imposing a fine of $1,000 per day for violation of any

final order, authorizing the penalizing agency to compromise or

modify such penalty, providing for assessment and collection of

such penalty by written notice, and defining ''violates'', and

added subpars. (B) to (L).

Subsec. (k)(3). Pub. L. 101-73, Sec. 905(b), added par. (3).

Subsec. (l). Pub. L. 101-73, Sec. 908(b), amended subsec. (l)

generally. Prior to amendment, subsec. (l) read as follows: ''Any

director, officer, or committee member, or former director,

officer, or committee member, of an insured credit union or of a

credit union any of the member accounts of which are insured, or

any other person against whom there is outstanding and effective

any notice or order (which is an order which has become final)

served upon such director, officer, committee member, or other

person under subsections (g)(4), (g)(5), or (i) of this section and

who (i) participates in any manner in the conduct of the affairs of

the credit union involved, or directly or indirectly solicits or

procures, or transfers or attempts to transfer, or votes or

attempts to vote, any proxies, consents, or authorizations in

respect of any voting rights in such credit union, or (ii) without

the prior written approval of the Board votes for a director,

serves or acts as a director, officer, committee member, or

employee of any credit union, shall upon conviction be fined not

more than $5,000 or imprisoned for not more than one year, or

both.''

Subsec. (o). Pub. L. 101-73, Sec. 901(b)(2)(G), substituted

''institution-affiliated party'' for ''director, officer, committee

member or other person participating in the conduct of its

affairs''.

Subsec. (p). Pub. L. 101-73, Sec. 915(b), in first sentence,

inserted ''or in connection with any claim for insured deposits or

any examination or investigation under section 1784(b) of this

title'' after ''any proceeding under this section'', '', in

conducting the proceeding, examination, or investigation or

considering the claim for insured deposits,'' after ''section, the

Board'', and '', claims, examinations, or investigations'' before

period at end.

Subsec. (r). Pub. L. 101-73, Sec. 901(a), added subsec. (r).

Subsec. (s). Pub. L. 101-73, Sec. 913(b), added subsec. (s).

1987 - Pub. L. 100-86, Sec. 509(a), repealed Pub. L. 97-320, Sec.

141. See 1982 Amendment notes below.

Subsec. (g)(1). Pub. L. 100-86, Sec. 709(1), substituted

''committee member, or employee'' for ''or committee member'' in

three places.

Subsec. (g)(2