As Introduced

127th General Assembly Regular Session 2007-2008

S. B. No. 247

Senator Spada 

Cosponsors: Senators Grendell, Seitz, Padgett, Schuring, Buehrer, Mumper, Cates, Roberts, Cafaro, Kearney, Morano 

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A BILL

To amend sections 926.29, 1733.13, 1733.15, 1733.19,

1

1733.329, and 1733.34 and to enact sections

2

1733.241, 1733.242, 1733.243, and 1733.291 of the

3

Revised Code relative to changes in the Credit

4

Union Regulation Law.

5

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 926.29, 1733.13, 1733.15, 1733.19,	6
1733.329, and 1733.34 be amended and sections 1733.241, 1733.242,	7
1733.243, and 1733.291 of the Revised Code be enacted to read as	8
follows:	9

Sec. 926.29.  (A) A delayed price agreement is an executory	10
contract that shall be in such a form and contain such terms as	11
the director of agriculture shall adopt by rule under Chapter 119.	12
of the Revised Code. The agreement shall be executed by and	13
between the licensed handler and the depositor or by their	14
authorized representatives not later than fifteen days after the	15
first delivery of an agricultural commodity is received for	16
delayed pricing under the agreement. The handler shall maintain a	17
file of executed agreements that are available for inspection at	18
any reasonable time by the director or the director's designated	19
representative. The handler also shall keep records and ledgers	20
the director considers necessary to document the handler's	21
obligation to the depositor under a delayed price agreement. The	22
handler also shall provide reports, forms, and other evidence the	23
director shall adopt by rule to document the storage and marketing	24
of commodities under the delayed price agreement.	25

(B) Subject to the lien that attaches under section 926.021	26
of the Revised Code and except as otherwise provided in division	27
(C) of this section, a licensed handler who purchases any	28
agricultural commodity under a delayed price agreement at all	29
times shall maintain the commodity, rights in the commodity,	30
proceeds from the sale of the commodity, or a combination of the	31
commodity, rights, and proceeds equal to at least ninety per cent	32
of the value of the handler's obligation for all commodities that	33
the handler has purchased that are not priced under delayed price	34
agreements. The obligation shall be secured or represented by one	35
or more of the following:	36

(1) Maintenance of the commodity in storage in the handler's	37
warehouse;	38

(2) Rights in commodities as evidenced by a receipt or ticket	39
for storage of the commodities under a bailment agreement in	40
another warehouse approved by the director;	41

(3) Proceeds from the sale of commodities as evidenced or	42
represented by one or more of the following:	43

(a) Cash on hand or held on account in a state or federally	44
licensed financial institution or a lending agency of the farm	45
credit administration;	46

(b) Short-term investments held in time accounts with state	47
or federally licensed financial institutions or a lending agency	48
of the farm credit administration;	49

(c) Balances in commodity margin accounts;

50

(d) Commodities sold and shipped by the handler under delayed	51
price agreements that have not been priced less any payments or	52
advances that have been received by the handler;	53

(e) Such other evidence of unencumbered assets as may be	54
acceptable to the director, including an irrevocable letter of	55
credit.	56

(C) In addition to the lien that attaches under section	57
926.021 of the Revised Code, a depositor who sells an agricultural	58
commodity to a licensed handler under a delayed price agreement,	59
upon giving notice to the handler either at or prior to the time	60
of delivery, may demand as security for payment for the commodity	61
an amount that, at the time of delivery, is equal to one hundred	62
per cent of the national loan rate value of the commodity under	63
the United States department of agriculture price support program,	64
or seventy-five per cent of the average price being paid for the	65
commodity in the state on the date of demand as published by the	66
market news service of the department of agriculture, whichever is	67
less. The handler shall satisfy a demand for security on a	68
commodity sold under a delayed price agreement at the handler's	69
option by one of the following:	70

(1) Payment to the depositor by cash or bank draft on the	71
account of the handler;	72

(2) Causing an irrevocable letter of credit to be issued to	73
the depositor by a bankfinancial institution designated by the	74
handler securing payment in the specified amount. The letter of	75
credit shall be subject to Chapter 1305. of the Revised Code and	76
rules adopted by the director pursuant to Chapter 119. of the	77
Revised Code.	78

Sec. 1733.13.  (A) Each voting member present in person, by	79
proxy, or by mail ballot is entitled to cast one vote,	80
irrespective of the number of shares hethe member owns, on each	81
matter properly submitted to the members for their vote, consent,	82
waiver, release, or other action.	83

(B) The chairmanchairperson of the board, the president, any	84
vice-president, secretary, or treasurer of any association member	85
of the credit union shall conclusively be presumed to have	86
authority to cast the vote of such association member and to	87
appoint proxies and execute consents, waivers, releases, on its	88
behalf, unless before a vote is taken or a consent, waiver, or	89
release is acted upon, it appears by a certified copy of the code	90
of regulations, bylaws, or a resolution of the trustees,	91
directors, or executive committee of the said association member,	92
that such authority does not exist or is vested in some other	93
officer or person. For the purposes of this section, a person	94
exercising such authority as such officer is prima-facie to be	95
considered duly elected, qualified, and acting as such officer.	96

(C) If the articles or regulations so provide, any person,	97
who is entitled to attend a members' meeting to vote thereat, or	98
to execute consents, waivers, or releases, may:	99

(1) Vote thereat, and execute consents, waivers, and	100
releases, and exercise any of histhe person's other rights, by	101
mail ballot delivered to the office of the credit union at least	102
seven days prior to the date set for the meeting. At least thirty	103
days' notice shall be given to all eligible members of the date	104
set for such meeting. No mail ballot shall be valid after the	105
expiration of eleven months after delivery to the credit union.	106
The form of any mail ballot mustshall comply with criteria	107
established by the superintendent or have the prior written	108
approval of the superintendent of credit unions.	109

(2) Be represented at such meeting or vote thereat, and	110
execute consents, waivers, and releases, and exercise any of his	111
the person's other rights, by proxy or proxies appointed by a	112
writing signed by such person. No appointment of a proxy shall be	113
valid after the expiration of eleven months after it is made. The	114
form of any proxy mustshall comply with criteria established by	115
the superintendent or have the prior written approval of the	116
superintendent.	117

Sec. 1733.15.  (A) Except as otherwise provided by law, the	118
articles, or regulations, the corporate powers of a credit union	119
shall be exercised, its business conducted, and its property	120
controlled by a board of directors, provided that the number of	121
directors fixed by the articles or regulations shall not be less	122
than five.	123

(B) All directors shall be voting members of the credit	124
union.	125

(C) The articles or regulations may divide directors into two	126
or more classes whose terms of office shall expire at different	127
times and may fix the term of office of the directors or of any	128
class of directors at not more than three years from the date of	129
their election.	130

(D) For their own government, the directors may adopt or	131
amend bylaws or adopt amended bylaws not inconsistent with the	132
articles or regulations.	133

(E) In discharging hisofficial duties, a director may, when	134
acting with reasonable care and in good faith, rely upon the books	135
and records of the credit union, upon reports made to the credit	136
union by an officer or employee or by any other person selected	137
for the purpose with reasonable care by the credit union, and upon	138
financial statements or written reports prepared by an officer or	139
employee of the credit union in charge of its accounts or	140
certified by a public accountant or firm of public accountants.	141

(F) A credit union shall not elect or appoint a person to its	142
board of directors who is presently serving as a director of	143
another credit union, unless either of the following conditions	144
has been met:	145

(1) If the person presently serves on the board of directors	146
of a credit union having assets of less than five million dollars,	147
the credit union, prior to retaining the person's services,	148
notifies the superintendent of credit unions in writing of the	149
person's candidacy or appointment as a director.	150

(2) If the person presently serves on the board of directors	151
of a credit union having assets of five million dollars or more,	152
the superintendent has approved the person's candidacy or	153
appointment.	154

(G) If the number of candidates for the board of directors	155
does not exceed the number of director positions being elected,	156
those candidates shall be deemed elected and shall serve as set	157
forth in the articles or regulations.	158

Sec. 1733.19.  (A) The regulations may provide for the	159
creation by the directors of an executive committee consisting of	160
not less than three directors, and may authorize the delegation to	161
any such committee of any of the authority of directors other than	162
any action requiring more than a majority vote of the board of	163
directors; provided, that the executive committee shall exercise	164
only such authority in the interim between the meetings of the	165
board and shall make a full report of, and the board shall review,	166
all actions taken at any meeting of such committee at the next	167
regular meeting of the board of directors following the meeting of	168
the executive committee.	169

(B) Unless the articles or regulations provide a different	170
method for the establishment of a supervisory audit committee, the	171
board of directors shall appoint a supervisory audit committee of	172
not less than three individual voting members for such term as is	173
provided in the regulations. The committee shall audit the books	174
of the credit union at least annually, using generally accepted	175
auditing procedures and standards, and shall report its findings	176
to the board. Under the supervision of the supervisory audit	177
committee, accounts showing installment payments by members upon	178
shares of the credit union shall be verified at least annually.	179

(C) In lieu of the appointment of a supervisory audit	180
committee as provided in division (B) of this section, the board	181
of directors may employ a public accountant or a firm of public	182
accountants to perform the functions of a supervisory audit	183
committee. The board of directors may appoint an audit committee	184
to oversee the public accountant or firm of public accountants.	185

(D) The superintendent of credit unions may require at any	186
time that a credit union have its accounts audited in accordance	187
with generally accepted auditing standards by an outside auditor.	188
The outside auditor shall be retained, and expense of any such	189
audit shall be paid, by the credit union.	190

(E) Unless the articles or regulations provide for the	191
appointment of loan officers in lieu of a credit committee, the	192
board of directors shall appoint, or the members shall elect, a	193
credit committee composed of not less than three individual voting	194
members, which committee shall have such powers in the granting of	195
loans and the supervision of lending practices as shall be	196
delegated to it by the articles, regulations, or resolutions of	197
the board of directors. The credit committee shall make regular	198
reports of their activities to the board of directors, and the	199
board of directors shall review the reports.	200

(F) If the articles or regulations so provide, a credit union	201
may establish an advisory board consisting of persons selected by	202
the board of directors or their designee. Persons serving on the	203
advisory board need not be members of the credit union, they may	204
be paid per diem not exceeding thirty dollars per day and expenses	205
for their services on such board, and their duties shall be to	206
make recommendations on financial and policy matters of the credit	207
union.	208

(G) A credit union may establish such other committee or	209
committees as shall be provided for in the articles, regulations,	210
bylaws, or by resolution of the board of directors.	211

Sec. 1733.241.  (A) When a share, share account, or deposit	212
is made in the name of two or more persons, payable to either or	213
the survivor, the credit union may pay all of the share, share	214
account, deposit, any part of the share, share account, deposit,	215
or any interest earned on the share, share account, or deposit, to	216
either of the named persons, or the guardian of the estate of	217
either of the named persons, whether or not the other person is	218
living. The receipt or acquittance of the person paid is a	219
sufficient release and discharge of the credit union for any	220
payments made from the account to that person.	221

(B) A credit union may enter into a written contract with a	222
natural person for the proceeds of the person's shares, share	223
accounts, or deposits to be payable on the death of that person	224
to another person or to any entity or organization in accordance	225
with the terms, restrictions, and limitations set forth in	226
sections 2131.10 and 2131.11 of the Revised Code.	227

Sec. 1733.242. (A) On the terms and conditions the credit	228
union prescribes, a credit union may do all of the following:	229

(1) Provide safes, vaults, safe deposit boxes, night	230
depositories, and other secure receptacles for the uses, purposes,	231
and benefits of its members;	232

(2) Receive tangible property and evidence of tangible or	233
intangible property for safekeeping using the credit union's	234
safes, vaults, secure receptacles, or safekeeping system; the	235
safes, vaults, secure receptacles, or safekeeping system of	236
another credit union; or the safekeeping system of a safekeeping	237
agent or custodian.	238

(B)(1) A credit union may enter into an agreement to rent a	239
safe deposit box to a minor and accept the appointment of a minor	240
as agent or deputy on any deposit or safe deposit box by any	241
person, including a minor, maintaining the deposit or safe deposit	242
box.	243

(2) When a credit union enters into a safe deposit box rental	244
agreement with a minor pursuant to division (B)(1) of this	245
section, all of the following apply:	246

(a) The terms and conditions of the safe deposit box rental	247
agreement are binding on the minor the same as a person of legal	248
age who rents a safe deposit box.	249

(b) The relationship between the credit union and the minor	250
regarding the safe deposit box rental agreement is in all respects	251
the same as if the minor were a person of legal age.	252

(c) The credit union shall incur no liability for any	253
transaction regarding the safe deposit box solely because of doing	254
business with a minor.	255

(3) Nothing in divisions (B)(1) and (2) of this section shall	256
be construed to limit the parental rights provided under section	257
2111.08 of the Revised Code or to limit the rights of a guardian	258
appointed pursuant to Chapter 2111. of the Revised Code.	259

(C) The superintendent of financial institutions shall	260
promulgate rules to qualify a credit union, safekeeping agent, or	261
custodian that may receive from another credit union tangible	262
property and evidence of tangible or intangible property for	263
safekeeping pursuant to division (A) of this section.	264

Sec. 1733.243. If any claim is made to any share, share	265
account, deposit, safe deposit box, property held in safekeeping,	266
security, obligation, or other property in the credit union's	267
possession or control, in whole or in part, by any person,	268
including any member, depositor, individual, or group of	269
individuals, without clear authority to draw on or exercise any	270
right or control with respect to the property, the credit union is	271
not required to recognize the claim without one of the following:	272

(A) A court order, issued by a court of competent	273
jurisdiction and served on the credit union, enjoining or	274
restraining the credit union from taking any action with respect	275
to the property or instructing the credit union to pay the balance	276
of the account, provide access to the safe deposit box, or deliver	277
the property as provided in the order;	278

(B) A bond, provided by the person making the claim, in the	279
form and amount and with sureties satisfactory to the credit	280
union, indemnifying the credit union against any liabilities,	281
loss, and expenses the credit union might incur because of its	282
recognition of the claim or because of its refusal, due to the	283
claim, to honor or recognize any right with respect to the	284
property.	285

Sec. 1733.291.  (A) Every credit union shall retain or	286
preserve the following credit union records and supporting	287
documents for only the following periods of time:	288

(1) For one year:

289

(a) Broker's confirmations, invoices, and statements relating	290
to security transactions of the credit union or for or with its	291
customers, after the date of transaction;	292

(b) Corporate resolutions, partnership authorizations, and	293
similar authorizations relating to closed accounts, loans that	294
have been paid, or other completed transactions, after the date of	295
closing, payment, or completion;	296

(c) Ledger records of safe deposit accounts, after the date	297
of last entry on the ledger;	298

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

299

(e) Records relating to closed Christmas club or similar	300
limited duration special purpose accounts, after the date of	301
closing;	302

(f) Records relating to customer collection accounts, after	303
the date of transaction;	304

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

305

(h) All records relating to closed consumer credit loans and	306
discounts, after the date of closing;	307

(i) Deposit tickets relating to demand deposit accounts,	308
after the date of deposit.	309

(2) For six years:

310

(a) Deposit and withdrawal tickets relating to open or closed	311
savings accounts, after the date of transaction;	312

(b) Individual ledger sheets or other records serving the	313
same purpose that show a zero balance and that relate to demand,	314
time, or savings deposit accounts, and safekeeping accounts, after	315
the date of last entry, or, where the ledger sheets or other	316
records show an open balance, after the date of transfer of the	317
amount of the balance to another ledger sheet or record;	318

(c) Official checks, drafts, money orders, and other	319
instruments for the payment of money issued by the credit union	320
and that have been canceled, after the date of issue;	321

(d) Records relating to closed escrow accounts, after the	322
date of closing;	323

(e) Records, other than corporate resolutions, partnership	324
authorizations, and similar authorizations relating to closed	325
loans and discounts other than consumer credit loans and	326
discounts, after the date of closing;	327

(f) Safe deposit access tickets and correspondence or	328
documents relating to access, after the date of transaction;	329

(g) Lease or contract records relating to closed safe deposit	330
accounts, after the date of closing;	331

(h) Signature cards relating to closed demand, savings, or	332
time accounts, closed safe deposit accounts, and closed	333
safekeeping accounts, after the date of closing;	334

(i) Undelivered statements for demand deposit, negotiable	335
order of withdrawal, savings, agency, brokerage, or other accounts	336
for which customer statements are prepared, and canceled checks or	337
other items, after the date of statement, provided the credit	338
union has attempted to send the statements and checks or other	339
items to its customer, has held them pursuant to the instructions	340
of or an agreement with its customer, or has made them available	341
to its customer.	342

(B) The superintendent of financial institutions may	343
designate a retention period of either one year or six years for	344
any record maintained by a credit union but not listed in division	345
(A) of this section. The credit union shall retain or preserve	346
records that are not listed in division (A) of this section and	347
for which the superintendent has not designated a retention period	348
for six years from the date of completion of the transaction to	349
which the record relates or, if the last entry has been	350
transferred to a new record showing the continuation of a	351
transaction not yet completed, from the date of the last entry.	352

(C) The requirements of divisions (A) and (B) of this section	353
may be complied with by the preservation of records in the manner	354
prescribed in section 1733.29 of the Revised Code.	355

(D) In construing the terms set forth in division (A) of this	356
section, reference may be made to general credit union usage.	357

(E) A credit union may dispose of any records that have been	358
retained or preserved for the period set forth in divisions (A)	359
and (B) of this section.	360

(F) Any action by or against a credit union based on, or the	361
determination of which would depend on, the contents of records	362
for which a period of retention or preservation is set forth in	363
divisions (A) and (B) of this section shall be brought within the	364
time for which the record must be retained or preserved.	365

(G) Where a record may be classified under either division	366
(A)(1) or (2) of this section, the credit union shall retain or	367
preserve the record for the period set forth in division (A)(2) of	368
this section.	369

Sec. 1733.329.  (A) There is hereby created in the division	370
of financial institutions the credit union council, which shall	371
consist of seven members. The deputy superintendent for credit	372
unions shall be a member of the council and its chairperson. The	373
governor, with the advice and consent of the senate, shall appoint	374
the remaining six members.	375

(B)(1) At least five of the six members appointed to the	376
council shall have had credit union experience.	377

(2) At least four of the six members appointed to the council	378
shall be, at the time of appointment, individuals currently	379
engaged in the exercise of duties, responsibilities, rights, and	380
powers of a director or chief executive officer of a	381
state-chartered credit union having its principal office in this	382
state and doing business in this state pursuant to this chapter	383
under the authority of the superintendent of financial	384
institutions.	385

(3) At least one of the six members appointed to the council	386
shall be a director or chief executive officer of a	387
state-chartered, federally insured credit union.	388

(4) At least one of the six members appointed to the council	389
shall be a director or chief executive officer of a	390
state-chartered, privately insured credit union.	391

(5) At least one of the six members appointed to the council	392
shall be a director or chief executive officer of a	393
state-chartered credit union with fivethirty-five million dollars	394
or less in assets.	395

(6) At least one of the six members appointed to the council	396
shall be a director or chief executive officer of a	397
state-chartered credit union with more than fivefifty million	398
dollars in assets.	399

(C)(1) Initial appointments to the council shall be made	400
within sixty days after the effective date of this section. Of the	401
initial appointments, two shall expire one year after the	402
effective date of this section, two shall expire two years after	403
the effective date of this section, and two shall expire three	404
years after the effective date of this section. Thereafter, terms	405
of office shall be for three years.	406

(2) Each member shall hold office from the date of	407
appointment until the end of the term for which the member was	408
appointed. In the case of a vacancy in the office of any member,	409
the governor shall appoint a successor, who shall hold office for	410
the remainder of the term for which the successor's predecessor	411
was appointed. Any member shall continue in office subsequent to	412
the expiration date of the member's term until the member's	413
successor takes office, or until sixty days has elapsed, whichever	414
occurs first.	415

(3) If during a member's term on the council, the member	416
ceases to be a director or chief executive officer of a credit	417
union as described in divisions (B)(2) to (6) of this section for	418
a period exceeding ninety days, the member shall be ineligible to	419
continue to serve as a member of the council, and the member's	420
position on the council shall be considered vacant.	421

(D) No person appointed as a member of the credit union	422
council may serve more than two consecutive full terms. However, a	423
member may serve two consecutive full terms following the	424
remainder of a term for which the member was appointed to fill a	425
vacancy or following any term for which the member was appointed	426
prior to the effective date of this section.	427

(E)(1) The council shall hold regular meetings at the time	428
and place it fixes, but at least once every six months, and shall	429
meet at any time on call of the deputy superintendent to conduct	430
its business and to decide by vote of the members the location of	431
future meetings. Each member shall be provided with written notice	432
of the time and location of each council meeting at least two days	433
prior to the scheduled date of the meeting, unless the council by	434
resolution provides for a shorter time. Four of the members of the	435
council constitute a quorum to transact and vote on all business	436
coming before the council.	437

(2) The council, by a majority vote of those present at a	438
meeting at which there is a quorum, may adopt and amend bylaws and	439
rules the council considers necessary and proper. The council	440
shall select one of its members as secretary, who shall keep a	441
record of all its proceedings.	442

(3) No member shall participate in a proceeding before the	443
council involving any credit union of which the member is or was	444
at any time in the preceding twelve months a member of the board	445
of directors, an officer, an employee, or a shareholder. A member	446
may refrain from participating in the proceedings of the council	447
for any other cause the member considers sufficient.	448

(F) The members of the council shall receive no salary, but	449
their expenses incurred in performance of their duties shall be	450
paid from funds appropriated for that purpose.	451

(G) The governor may remove any of the six members appointed	452
to the council whenever in the governor's judgment the public	453
interest requires removal. Upon removing a member of the council,	454
the governor shall file with the superintendent of financial	455
institutions a statement of the cause for the removal.	456

Sec. 1733.34.  (A) Any credit union may, with the approval of	457
the superintendent of credit unions, merge with any other credit	458
union under the existing charter of the other credit union,	459
pursuant to any plan approved by the board of directors of each	460
credit union joining in the merger, and approved by two-thirdsa	461
majority of the members of each credit union represented at a	462
meeting of members in person, by ballot, or by proxy, duly called	463
for such purpose, at which a minimum of ten per centquorum of the	464
entire membership is present, unless such meeting of members of	465
either credit union has been waived by the superintendent. The	466
superintendent may waive the members vote if it is in the interest	467
of the members, credit union, or for any other reason the	468
superintendent deems proper. After such approval of the board and	469
members of each credit union, the president or chairman	470
chairperson of the board and secretary of each credit union shall	471
execute a certificate of merger, which shall set forth all of the	472
following:	473

(1) The time and place of the meeting of the board of	474
directors at which the plan was agreed upon;	475

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

476

(3) A copy of the resolution or other action by which the	477
plan was agreed upon;	478

(4) The time and place of the meeting of the members at which	479
the plan agreed upon was approved;	480

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

481

(B) Such certificates and a copy of the plan of merger agreed	482
upon shall be forwarded to the superintendent and, upon approval,	483
returned to the merging credit unions.	484

(C) Upon any such merger so effected, all property, property	485
rights, and interests of the merged credit unions shall vest in	486
the surviving credit union without deed, endorsement, or other	487
instrument of transfer, and all debts, obligations, and	488
liabilities of the merged credit unions shall be deemed to have	489
been assumed by the surviving credit union under whose charter the	490
merger was effected.	491

(D) This section shall be construed, whenever possible, to	492
permit a credit union chartered under any other act to merge with	493
one chartered under this act.	494

(E) All persons and associations eligible for membership, as	495
provided in section 1733.05 of the Revised Code, of both credit	496
unions effecting a merger shall be deemed to have a common bond of	497
association.	498

Section 2.  That existing sections 926.29, 1733.13, 1733.15,	499
1733.19, 1733.329, and 1733.34 of the Revised Code are hereby	500
repealed.	501