Sec. 1761.05. (A) No person shall guarantee to a credit | 13 |
union payment of a credit union share account of an individual | 14 |
member or, as described in division (B)(2) of section 1761.02 of | 15 |
the Revised Code, a nonmember of a credit union or otherwise issue | 16 |
or effect credit union share guaranty insurance until the | 17 |
superintendent of insurance has licensed it to do so as a credit | 18 |
union share guaranty corporation under this chapter. Such license | 19 |
shall not be issued or renewed unless an applicant for a license | 20 |
or a credit union share guaranty corporation satisfies the | 21 |
following conditions: | 22 |
(6) The applicant or corporation submits an audited financial | 44 |
statement verified by the oath of the president and secretary of | 45 |
the corporation, which demonstrates the corporation's compliance | 46 |
with generally accepted accounting principles, and the applicant | 47 |
or corporation submits an annual statement in accordance with | 48 |
sections 3929.30 and 3941.29 of the Revised Code that demonstrates | 49 |
the applicant's or corporation's solvency according to principles | 50 |
of statutory accounting; | 51 |
(C) In the event the superintendent determines to refuse to | 64 |
renew or deny the license, the superintendent shall specify all | 65 |
reasons for the refusal or denial in the superintendent's written | 66 |
order and shall set the matter for hearing under Chapter 119. of | 67 |
the Revised Code within thirty days after issuance of that written | 68 |
order. At such hearing, the applicant or credit union share | 69 |
guaranty corporation may present evidence to demonstrate its | 70 |
ability to satisfy the conditions required for the issuance or | 71 |
renewal of a license under division (A) of this section. Within | 72 |
twenty days after the conclusion of the hearing, the | 73 |
superintendent shall issue a final order either issuing, renewing, | 74 |
refusing to renew, or denying the license. The final order shall | 75 |
comply with the requirements of an adjudication order under | 76 |
Chapter 119. of the Revised Code. The applicant or credit union | 77 |
share guaranty corporation aggrieved by the final order may appeal | 78 |
in accordance with Chapter 119. of the Revised Code. | 79 |
(4) Upon the written order of the superintendent of credit | 97 |
unions or other credit union supervisory authority, and at such | 98 |
compensation as shall be agreed upon, the corporation may assume | 99 |
control of the property and business of any participating credit | 100 |
union and operate it at the direction of the superintendent or | 101 |
other authority until its financial stability has been | 102 |
reestablished to the satisfaction of the superintendent or other | 103 |
authority, or the credit union has been liquidated or merged into | 104 |
another credit union; | 105 |
(7) Borrow money, and issue, sell, and pledge its notes, | 112 |
bonds, and other evidences of indebtedness, and secure any of its | 113 |
obligations by mortgage, pledge, or deed of trust of all or any of | 114 |
its property, and guarantee or secure obligations of participating | 115 |
credit unions, subject to section 3901.72 of the Revised Code; | 116 |
(14) Become a member or shareholder in any organization, | 135 |
domestic or foreign, regional or national, organized and operated | 136 |
for the purpose of assisting the corporation in carrying out its | 137 |
purposes and, subject to the approval of the superintendent of | 138 |
credit unions, delegate to such organization any one or more of | 139 |
the functions for which it is responsible under this chapter; | 140 |
(B) The corporation may obtain, and continuously maintain in | 145 |
effect, reinsurance and a line of credit, each from one or more | 146 |
insurance companies or financial institutions and in such amount | 147 |
as determined by its board of directors. The superintendent of | 148 |
credit unions or the superintendent of insurance may require the | 149 |
corporation to obtain and maintain reinsurance or a line of credit | 150 |
but only in the event the superintendent of credit unions or the | 151 |
superintendent of insurance first finds that such reinsurance or | 152 |
line of credit is actuarially or financially necessary and is | 153 |
reasonably available to the corporation. Such determination shall | 154 |
be made on a year-to-year basis. | 155 |
Sec. 1761.08. (A)(1) In order to permit the credit union | 179 |
share guaranty corporation to assess the financial condition and | 180 |
performance of a credit union, upon the written request of the | 181 |
corporation, the superintendent of credit unions or other credit | 182 |
union supervisory authority or the national credit union | 183 |
administration may furnish to the corporation a copy of unaudited | 184 |
financial statements filed by a participating credit union or a | 185 |
credit union making application to participate in the corporation | 186 |
pursuant to divisions (B) and (C) of section 1733.32 of the | 187 |
Revised Code or a comparable state or federal statute or of any | 188 |
examination reports of the superintendent or other credit union | 189 |
supervisory authority which were prepared pursuant to division (A) | 190 |
of section 1733.32 of the Revised Code or a comparable state or | 191 |
federal statute. | 192 |
(B)(1) Each participating credit union shall submit to the | 204 |
credit union share guaranty corporation quarterly, or more | 205 |
frequently as considered necessary by the corporation, a copy of | 206 |
its financial statements, delinquent loan report, and any other | 207 |
information considered necessary by the credit union share | 208 |
guaranty corporation in order to assess the financial performance | 209 |
of the participating credit union. The corporation may require | 210 |
that participating credit unions submit financial information in | 211 |
the format required by the corporation. | 212 |
(E)(1) Upon determination by the superintendent of credit | 235 |
unions or the credit union share guaranty corporation that a | 236 |
participating credit union is operating in an unsafe or unsound | 237 |
manner, or that financial statements, delinquent loan reports, and | 238 |
other data received or examined by the corporation is unreliable | 239 |
or the participating credit union investment in the corporation is | 240 |
in excess of five per cent of the corporation's fund, the | 241 |
corporation shall require that an audit of the books and records | 242 |
of the participating credit union be conducted. The audit shall be | 243 |
completed in accordance with generally accepted auditing | 244 |
standards, and include such testing of the records necessary to | 245 |
render an opinion of an independent certified public accountant. | 246 |
(2) If the report, certificate, or opinion of the independent | 247 |
accountant, as described in division (E)(1) of this section, is in | 248 |
any way qualified, the corporation shall require the credit union | 249 |
to take such action as the corporation considers necessary to | 250 |
permit an independent accountant to remove such qualification from | 251 |
the report, certificate, or opinion. If such qualification is not | 252 |
remedied within the time period designated, the corporation shall | 253 |
report such qualification in writing to the superintendent within | 254 |
three days thereof. | 255 |
(4) There shall be no liability on the part of, and no cause | 274 |
of action of any nature shall arise against, the corporation or | 275 |
its participating credit unions, directors, officers, employees, | 276 |
or agents, or the superintendent or other credit union supervisory | 277 |
authority or the national credit union administration, for any | 278 |
statements made by them in any reports or recommendations made in | 279 |
accordance with division (E) of this section. | 280 |
(F) When an examination or investigation of any participating | 281 |
credit union is considered necessary for good cause shown by the | 282 |
superintendent of credit unions under this chapter, the | 283 |
corporation shall pay to the superintendent of credit unions the | 284 |
cost thereof, including the salary or other compensation paid to | 285 |
the persons making the examination or rendering special services | 286 |
and overhead cost incurred in connection with the examination or | 287 |
investigation as fixed by the superintendent. In determining the | 288 |
costs of services or examinations, the superintendent may use the | 289 |
estimated hourly cost for all persons performing services for, or | 290 |
examinations of, the corporation for the fiscal year. Travel | 291 |
expenses shall be paid by the division of financial institutions. | 292 |
(G) Neither the corporation nor any participating credit | 293 |
union, as an agent of the corporation or of its participating | 294 |
credit unions, or any other person shall use information obtained | 295 |
under division (A), (B), (C), (D), or (E) of this section for any | 296 |
purpose not authorized by this section. The conviction for | 297 |
violation of this division by any person located outside this | 298 |
state shall be reported to the appropriate credit union | 299 |
supervisory authority or the national credit union administration | 300 |
for prosecution under the laws of that jurisdiction. | 301 |
Sec. 1761.09. (A) Each credit union share account of an | 302 |
individual member or, as described in division (B)(2) of section | 303 |
1761.02 of the Revised Code, a nonmember of a participating credit | 304 |
union shall be guaranteed in amounts established from time to time | 305 |
by the credit union share guaranty corporation. Such primary | 306 |
guaranteed amount shall not be less than the amount of the credit | 307 |
union share account but, in no event, shall exceed two hundred | 308 |
fifty thousand dollars or the primary guaranteed amount insured by | 309 |
the national credit union administration, whichever is greater. | 310 |
Sec. 1761.10. (A)(1) A credit union share guaranty | 325 |
corporation shall establish and maintain a guarantee fund. The | 326 |
fund shall be maintained at a normal operating level as defined by | 327 |
the board of directors of the corporation and approved by the | 328 |
superintendent of insurance, except that the normal operating | 329 |
level shall at all times be no less than one per cent of the | 330 |
aggregate share capital of participating credit unions, | 331 |
irrespective of how denominated. The fund of the corporation shall | 332 |
be comprised of the following: | 333 |
(2)(a) Each participating credit union shall contribute to | 340 |
and maintain with the corporation a capital contribution to be | 341 |
credited to its account, in an amount equal to at least one per | 342 |
cent of its aggregate share capital as is established as the | 343 |
normal operating level of the fund by the board of directors | 344 |
pursuant to division (A)(1) of this section and approved by the | 345 |
superintendent of insurance. Each participating credit union's | 346 |
account shall be adjusted annually to reflect changes in the | 347 |
participating credit union's aggregate share capital in accordance | 348 |
with procedures adopted by the board of directors and may be | 349 |
adjusted more frequently if an increase in the aggregate share | 350 |
capital or a change in the financial condition of the | 351 |
participating credit union warrants such adjustment. Those credit | 352 |
unions participating in excess coverage shall pay a premium as | 353 |
prescribed by the board of directors of the corporation and as | 354 |
filed and approved under Chapter 3937. of the Revised Code. | 355 |
(b) The approval of the superintendent of insurance | 356 |
concerning the normal operating level of the guarantee fund | 357 |
expires upon written determination by the superintendent of | 358 |
insurance that there is cause for additions to the guarantee fund. | 359 |
This determination is not subject to any hearing requirement under | 360 |
Chapter 119. of the Revised Code, provided a credit union guaranty | 361 |
corporation may request a supervisory conference under section | 362 |
1761.19 of the Revised Code. | 363 |
(3) If, at the close of a fiscal year, the guarantee fund | 364 |
exceeds the normal operating level determined by the board of | 365 |
directors of a credit union share guaranty corporation, the board | 366 |
of directors may make a distribution of the excess to | 367 |
participating credit unions. Any distribution shall be made to | 368 |
each participating credit union in the proportion that each | 369 |
participating credit union's account bears to the total aggregate | 370 |
participating credit union accounts of the corporation. No | 371 |
determination by the board of directors is effective until | 372 |
approved by the superintendent of insurance. No distribution shall | 373 |
be made, nor shall it confer any rights, until approved by the | 374 |
superintendent of insurance. | 375 |
(B)(1) The corporation may annually or more frequently levy | 386 |
and collect additions to the capital contribution as the board of | 387 |
directors of the corporation considers appropriate. The | 388 |
corporation shall notify, if the superintendent of credit unions | 389 |
and the superintendent of insurance approve of such additions. | 390 |
Whenever the superintendent of credit unions or the superintendent | 391 |
of insurance considers it necessary for the maintenance of the | 392 |
normal operating level of the fund, the superintendent shall order | 393 |
the corporation to levy and collect additions to the capital | 394 |
contributions. Such order shall specify the amount of the addition | 395 |
and the reasons upon which the order is based. | 396 |
(C)(1) In the event of potential impairment of the fund, a | 404 |
special assessment of the fund may be levied by the corporation | 405 |
with the approval of the superintendent of credit unions or the | 406 |
superintendent of insurance. Impairment for this purpose is deemed | 407 |
to exist when the corporation's liabilities and share capital | 408 |
exceed its assets. Whenever the superintendent of credit unions or | 409 |
the superintendent of insurance considers it necessary to avoid an | 410 |
impairment of the fund, the superintendent shall order the | 411 |
corporation to levy a special assessment. Such order shall specify | 412 |
the amount of the assessment and the reasons upon which the order | 413 |
is based. | 414 |
(D)(1) The corporation may annually, or more frequently, levy | 423 |
on and collect special premium assessments from participating | 424 |
credit unions as the board of directors of the corporation | 425 |
considers necessary when the guarantee fund has experienced, or is | 426 |
expected to experience, a net loss for any one year, if the | 427 |
superintendent of credit unions and the superintendent of | 428 |
insurance approve of the special premium assessment. | 429 |
(2) The corporation shall send a written notice of the | 430 |
special premium assessment levied under division (D)(1) of this | 431 |
section to each participating credit union within thirty days | 432 |
after receipt of the approval of the superintendent of credit | 433 |
unions and the superintendent of insurance to charge the | 434 |
assessment. Special premium assessments shall be paid to the | 435 |
corporation by each participating credit union not later than | 436 |
thirty days after receipt of the notice of the assessment.
| 437 |
(3)(a) With the written approval of the superintendent of | 438 |
insurance, the corporation may declare and pay a cash dividend to | 439 |
those participating credit unions that are participating credit | 440 |
unions as of the date of the declaration and that have paid | 441 |
special premium assessments to the corporation. The amount of the | 442 |
dividend allocable to a participating credit union shall be | 443 |
determined based on the proportion of the special premium | 444 |
assessments paid by the credit union as compared to the total of | 445 |
all special premium assessments collected by the corporation. | 446 |
(E) A report of each capital contribution that may be | 451 |
required pursuant to division (B) of this section shall be made to | 452 |
the superintendent of credit unions and the superintendent of | 453 |
insurance within ninety days of the special assessment levy. A | 454 |
report of each special assessment or special premium assessment | 455 |
that is required pursuant to division (C) or (D) of this section | 456 |
shall be made to the superintendent of credit unions and the | 457 |
superintendent of insurance within ten days after mailing the | 458 |
written notice thereof to participating credit unions. | 459 |
(E)(F)(1) In the event any participating credit union fails | 460 |
to pay an annual capital contribution when due, the corporation | 461 |
shall report such default in writing to the superintendent of | 462 |
credit unions and the superintendent of insurance and the | 463 |
appropriate credit union supervisory authority or the national | 464 |
credit union administration within twenty-four hours of such | 465 |
default, and shall revoke after thirty days' notice the | 466 |
participating credit union's participation in the corporation, | 467 |
unless good cause is shown for the delay. | 468 |
(2) In the event any participating credit union fails to pay | 469 |
any additional capital contribution, premium, fee, or assessment | 470 |
when due, the corporation shall report such default in writing to | 471 |
the superintendent of credit unions and the superintendent of | 472 |
insurance and the appropriate credit union supervisory authority | 473 |
or the national credit union administration within twenty-four | 474 |
hours of such default, and shall revoke after thirty days' notice | 475 |
the participating credit union's participation in the corporation, | 476 |
unless good cause is shown for the delay. | 477 |
(F)(G) Any participating credit union that is voluntarily | 481 |
liquidated, any participating credit union that withdraws from | 482 |
participation in the corporation and obtains a different form of | 483 |
share guaranty or insurance pursuant to section 1733.041 of the | 484 |
Revised Code or similar state statute, or any participating credit | 485 |
union that merges with another credit union that becomes the | 486 |
surviving credit union whose shares are guaranteed or insured by a | 487 |
different form of guaranty or insurance may be refunded in an | 488 |
amount equal to the balance of its capital contribution account. | 489 |
Such reimbursement of a participating credit union's capital | 490 |
contribution account balance shall be paid only if and when the | 491 |
guarantee fund exceeds its normal operating level as calculated | 492 |
without the account of the withdrawing credit union. | 493 |
(3) In share certificates deposited in or any form of | 546 |
evidence of interest or indebtedness of any credit union organized | 547 |
under Chapter 1733. of the Revised Code or comparable state law if | 548 |
insured, or whose member accounts are insured as provided for by | 549 |
Title II of the "Federal Credit Union Act," 84 Stat. 994, (1970), | 550 |
12 U.S.C.A. 1781, as amended, or by comparable insurance. No | 551 |
investment under division (A)(3) of this section shall be in a | 552 |
participating credit union. | 553 |
(7) In bonds or other evidence of indebtedness rated in the | 565 |
three highest ratings by Standard and Poor's or Moody's service, | 566 |
not in default as to principal or interest, that are valid | 567 |
obligations issued, assumed, or guaranteed by any corporation | 568 |
incorporated under the laws of the United States or a state and | 569 |
described in division (D)(1) of section 3925.08 of the Revised | 570 |
Code. However, a credit union share guaranty corporation shall not | 571 |
invest in any such corporate security containing any provision of | 572 |
optionality, including, but not limited to, any derivative | 573 |
security. | 574 |
(9) In any other investments that are expressly approved by | 586 |
the superintendent of credit unions and the superintendent of | 587 |
insurance or are permitted by rules adopted by the superintendents | 588 |
pursuant to division (C) of section 1761.04 of the Revised Code, | 589 |
but such other investments shall not exceed twenty per cent of the | 590 |
sum of the capital contributions, retained and undivided earnings, | 591 |
and any borrowings made in accordance with section 3901.72 of the | 592 |
Revised Code of the corporation. The superintendents shall not | 593 |
permit the corporation to make any investment in any unrelated | 594 |
corporation or unrelated subsidiary without the prior written | 595 |
approval of the superintendent of credit unions and the | 596 |
superintendent of insurance. | 597 |
(E) The corporation shall not take a position in any | 611 |
corporate stock withoutWith the express written approval of the | 612 |
board of directors and the superintendent of credit unions and the | 613 |
superintendent of insurance, the corporation may invest in | 614 |
publicly traded preferred and common stocks, as permitted by | 615 |
section 3925.08 of the Revised Code, in an aggregate amount not to | 616 |
exceed the corporation's statutory unassigned surplus as reduced | 617 |
by its authorized control level risk-based capital. | 618 |
(C) Whenever the superintendent has taken possession of the | 645 |
property and business of the corporation, if it considers itself | 646 |
aggrieved thereby, the corporation may, within ten days after such | 647 |
taking, apply to the common pleas court of Franklin county to | 648 |
enjoin further proceedings. The court, after citing the | 649 |
superintendent to show cause why further proceedings should not be | 650 |
enjoined, and after a hearing and a determination of the facts | 651 |
upon the merits, may dismiss such application or enjoin the | 652 |
superintendent from further proceedings and direct himthe | 653 |
superintendent to surrender the property and business to the | 654 |
corporation, or make such further order as may be just. | 655 |