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Am. H. B. No. 506As Passed by the SenateAs Passed by the Senate
124th General Assembly | Regular Session | 2001-2002 |
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REPRESENTATIVES Salerno, Husted, Wolpert, R. Miller, Allen, Setzer, G. Smith, Peterson, Webster, Reidelbach, Britton, Sykes, Blasdel, Schmidt, Evans, Hoops, Ogg, Sulzer, Beatty, Kilbane, Flowers, Hughes, McGregor, Collier, Raga, Coates, Kearns, Flannery, Lendrum, Perry, Barrett, Hartnett, Otterman, D. Miller, Cirelli, Widowfield, Clancy, DeBose
SENATORS Spada, Prentiss, Carnes, Amstutz, Mallory, Brady, Hagan, Roberts, Harris, DiDonato
A BILL
To amend sections 1761.01, 1761.02, 1761.03, 1761.05
to 1761.10, and 1761.13 of the Revised Code to
modify the Credit Union Guaranty Corporations Law
regarding insurable credit union share accounts,
composition of a board of directors, eligibility
requirements for licensure, powers of a
corporation, reporting requirements, funds to be
included in a guarantee fund, and eligible
investments by a corporation.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1761.01, 1761.02, 1761.03, 1761.05,
1761.06, 1761.07, 1761.08, 1761.09, 1761.10, and 1761.13 of the
Revised Code be amended to read as follows:
Sec. 1761.01. As used in this chapter: (A) "Account" means the total of all amounts credited to a
participating credit union for paid-in capital contribution, and
other credits, net of any charges to that participating credit
union. "Account" is an "advancement" as that term is used in
section 3901.72 of the Revised Code, and is subject to
the
requirements of
such
that section. (B) "Capital contribution" means the amount each
participating credit union is required to maintain as a capital
deposit in the credit union share guaranty corporation. "Capital
contribution" is an "advancement" as that term is used in section
3901.72 of the Revised Code, and is subject to the
requirements
of
such
that section. "Capital contribution" constitutes assets of
the corporation up to the amount of the normal operating level
otherwise described in this chapter. (C) "Credit union," "state," and "member," unless otherwise
specified or
described in
this chapter, have the meanings given
such terms in Chapter 1733.
of the Revised Code. (D) "Credit union share accounts" means funds deposited in
any shares, accounts, deposits, or certificates of a
participating
credit union. (E) "Credit union share guaranty corporation" means a
corporation described in section 1761.02 of the Revised Code and
licensed by the superintendent of insurance under section 1761.04
of the Revised Code to guarantee payment of a credit union share
account of an individual member
or, as described in division
(B)(2) of section 1761.02 of the Revised Code, a nonmember of a
credit union or otherwise
issue or effect credit union share
guaranty insurance. (F) "Credit union share guaranty insurance" means that
insurance for the protection of share accounts of member credit
unions described in and required by section 1733.041 of the
Revised Code. (G) "Credit union supervisory authority" means that
official
who regulates credit unions in another state. (H) "Deficiency" means the difference between the
guaranteed
amount of an individual member's
or, as described in division
(B)(2) of section 1761.02 of the Revised Code, a nonmember's
credit union share
account and the proceeds of any liquidation of
a participating
credit union distributed or to be distributed to
the individual
member
or nonmember. (I) "National credit union administration" means the
federal
regulatory agency as established and defined by the
"Federal
Credit Union Act," 84 Stat. 994 (1970), 12 U.S.C. 1751,
as
amended, or any successor to the national credit union
administration. (J) "Participating credit union" means a credit union that
has applied for and been admitted to participation in a credit
union share guaranty corporation and whose participation has not
been terminated. (K) "Share capital" means the aggregate of all moneys in
credit union share accounts, irrespective of how denominated,
which show a balance due on the records of the participating
credit union and are guaranteed by the guaranty corporation. (L) "Superintendent of insurance" is the chief executive
officer and director of the department of insurance as provided
n
in Chapter 3901. of the Revised Code. (M) "Superintendent of credit unions" means the
superintendent of the
division of financial institutions of this
state.
Sec. 1761.02. (A) A credit union share guaranty
corporation
may be established, licensed, and operated in
compliance with this
chapter. (B)(1) A credit union share guaranty corporation may be
organized as a corporation under this chapter. Chapter 1701. or
1702. of the Revised Code, to the extent either is applicable and
not in conflict with this chapter and those chapters of Title
XXXIX of the Revised Code specified in division (A) of section
1761.04 of the Revised Code, applies to such corporation. A
credit union share guaranty corporation shall only be authorized
to
engage
do any of the following: (a) Engage in the business of guaranteeing payment of a
credit
union share account of an individual member of a credit
union
or
otherwise; (b) In accordance with division (B)(2) of this section,
engage in the business of guaranteeing payment of a credit union
share account of a nonmember of a credit union; (c) Otherwise issue or effect credit union share guaranty
insurance.
(2) For purposes of division (B) of this section, both of
the following apply: (a) Nonmember share accounts are subject to guaranty provided
by the credit union share guaranty corporation not exceeding
twenty per cent of the aggregate share accounts of the
participating credit union. (b) Nonmember share accounts are nonmember share accounts that are
received by a participating credit union that has been designated
by its supervisory authority as serving predominantly low-income
members; share accounts of other credit unions; and, to the extent
determined by the participating credit union's supervisory
authority to be received by that credit union consistent with law,
share accounts of public units or political subdivisions. For purposes of division (B)(2)(b) of this section, "supervisory authority" means, with respect to any credit union doing business in this state, the superintendent of financial institutions and, with respect to any credit union doing business in another state, the official who regulates credit unions in that state. (C) A credit union share guaranty corporation shall have
the
word "insurance" in its name. (D) Persons who receive from a credit union share guaranty
corporation any commission, salary, or other emolument for
services arising out of their association with the corporation
shall not comprise a majority of the membership of the board of
directors of the corporation.
Persons who are officers,
directors,
or employees of participating credit unions shall not
comprise a
majority of the membership of the board of directors
of a credit
union share guaranty corporation
This division does not apply to
persons who receive only an emolument consisting of fees or
expense reimbursements for serving as a member of the board of
directors of the corporation or of a committee of the board of
directors. (E) A credit union share guaranty corporation organized as
a
nonprofit corporation under this chapter is exempt from all
taxes
and fees imposed by this state or any county, municipal
corporation, local authority, or other subdivision, except that
any real property owned by the nonprofit corporation is subject
to
taxation to the same extent according to its value as other
real
property is taxed. (F) Notwithstanding the provisions of section 5725.18 of
the
Revised Code, the capital deposits or contributions by
participating credit unions shall not be included in the value of
capital and surplus subject to the annual franchise tax payable
by
a credit union share guaranty corporation organized under this
chapter nor shall any capital contributions, assessments, or fees
received from participating credit unions for primary coverage by
such credit union share guaranty corporation be included in the
gross amount subject to the annual franchise tax. Any payment
otherwise made under this division shall be in addition to any
taxes due as an insurer under Title LVII of the Revised Code.
Sec. 1761.03. The general purposes of a credit union share
guaranty corporation are: (A) To guarantee payment of all or a part of participating
credit union share accounts of an individual member
or, as
described in division (B)(2) of section 1761.02 of the Revised
Code, a nonmember of a
participating credit union, subject to any
express limitations as
provided in this chapter; (B) To aid and assist any participating credit union
which
that is in liquidation or incurs financial difficulty in order
that
the credit union share accounts are protected or guaranteed
against loss; (C) To cooperate with participating credit unions, the
superintendent of credit unions, the appropriate credit union
supervisory authorities, and the national credit union
administration for the purpose of advancing the general welfare
of
credit unions in this state and in
such other states where
participating credit unions operate.
Sec. 1761.05. (A) No person shall guarantee to a credit
union payment of a credit union share account of an individual
member
or, as described in division (B)(2) of section 1761.02 of
the Revised Code, a nonmember of a credit union or otherwise issue
or effect credit
union share guaranty insurance until the
superintendent of
insurance has licensed it to do so as a credit
union share
guaranty corporation under this chapter. Such license
shall not
be issued or renewed unless an applicant for a license
or a
credit union share guaranty corporation satisfies the
following
conditions: (1) The articles of incorporation of the applicant or
corporation, and any amendments thereto, are filed with and
approved by the secretary of state and the attorney general; (2) The articles of incorporation and the bylaws of the
applicant or corporation, and any amendments thereto, are
consistent with the provisions of this chapter and those chapters
of Title XXXIX of the Revised Code specified in division (A) of
section 1761.04 of the Revised Code, and are approved by the
superintendent of insurance; (3) The applicant holds bona fide applications for
participation in the corporation from at least
fifty
thirty credit
unions which shall become effective immediately upon issuance of
the license, or, in the case of a renewal of such license, the
corporation has at least
fifty
thirty participating credit unions; (4) The applicant or corporation maintains a reserve for
guarantee losses in compliance with section 1761.15 of the
Revised
Code; (5) The applicant or corporation has capital deposits in a
principal sum no less than five million dollars and such capital
deposits are invested in compliance with section
1761.12
1761.13
of the
Revised Code; (6) The applicant or corporation submits an audited
financial statement verified by the oath of the president and
secretary of the corporation, which demonstrates the
corporation's
compliance with generally accepted accounting
principles, and the
applicant or corporation submits an annual
statement in accordance
with sections 3929.30 and 3941.29 of the
Revised Code that
demonstrates the applicant's or corporation's
solvency according
to principles of statutory accounting; (7) The superintendent of credit unions certifies in
writing
to the superintendent of insurance that the applicant or
corporation is in compliance with this chapter; (8) The applicant or corporation is in compliance with
those
chapters of Title XXXIX of the Revised Code specified in
division
(A) of section 1761.04 of the Revised Code as determined
by the
superintendent of insurance. (B) The superintendent shall issue, renew, refuse to
renew,
or deny the license required by this section by written
order
issued within thirty days after receipt of the application.
The
superintendent shall issue or renew the license if the
conditions
set forth in division (A) of this section are
satisfied. (C) In the event the superintendent determines to refuse
to
renew or deny the license,
he
the superintendent shall
specify all
reasons for
the refusal or denial in
his
the superintendent's
written order
and shall set the
matter for hearing under Chapter
119. of the Revised Code within
thirty days after issuance of
his
that written order. At such
hearing, the applicant or credit
union share guaranty corporation
may present evidence to
demonstrate its ability to satisfy the
conditions required for the
issuance or renewal of a license
under division (A) of this
section. Within twenty days after the
conclusion of the hearing,
the superintendent shall issue
his
a
final order either issuing,
renewing, refusing to renew, or
denying the license. The final
order shall comply with the
requirements of an adjudication order
under Chapter 119. of the
Revised Code. The applicant or credit
union share guaranty
corporation aggrieved by the final order may
appeal in accordance
with Chapter 119. of the Revised Code. (D) The license required by this section shall be
renewable
annually on the anniversary date of the issuance of the
original
license.
Sec. 1761.06. (A) In carrying out its general purposes
as
set forth in section 1761.03 of the Revised Code, a credit
union
share guaranty corporation may
do any of the following: (1) Guarantee to participating credit unions the payment
of
any deficiency in the individual member's
or, as described in
division (B)(2) of section 1761.02 of the Revised Code, a
nonmember's credit union share
accounts caused by insolvency or
any other reason; (2) Issue credit union share guaranty insurance policies
or
otherwise effect credit union share guaranty insurance; (3) Advance funds in accordance with agreed lending terms
and conditions to aid participating credit unions to operate and
to meet liquidity requirements; (4) Upon the written order of the superintendent of credit
unions, and at such compensation as shall be agreed upon, the
corporation may assume control of the property and business of
any
participating credit union and operate it at the direction of
the
superintendent until its financial stability has been
reestablished to the satisfaction of the superintendent, or the
credit union has been liquidated or merged into another credit
union; (5) Assist in the merger, consolidation, or liquidation of
credit unions; (6) Purchase or otherwise acquire, lease as lessee, invest
in, hold, use, lease as lessor, encumber, sell, exchange,
transfer, and dispose of property of any description or any
interest therein; (7) Borrow money, and issue, sell, and pledge its notes,
bonds, and other evidences of indebtedness, and secure any of its
obligations by mortgage, pledge, or deed of trust of all or any
of
its property, and guarantee or secure obligations of
participating
credit unions, subject to section
3901.72 of the Revised Code; (8) Enter into contracts of insurance or reinsurance,
insuring in whole or in part its contractual guarantees to
participating credit unions and any other insurance or bonding
company contracts necessary or advisable in the conduct of its
business, provided a credit union share guaranty corporation
shall
not assume as reinsurer any risks from another insurer; (9) Receive money or other property from its participating
credit unions, or any person; (10) Invest its funds as provided in section 1761.13 of
the
Revised Code; (11) Receive by assignment, mortgage, or purchase any
asset
or interest therein owned or held by a participating credit
union; (12) Sell, assign, mortgage, encumber, or transfer
property
of any nature; (13) Conduct investigations, examinations, and audits of
any
applicant or participating credit union in order to determine
the
financial condition and operations of the applicant or
participating credit union; (14) Become a member or shareholder in any organization,
domestic or foreign, regional or national, organized and operated
for the purpose of assisting the corporation in carrying out its
purposes and, subject to the approval of the superintendent of
credit unions, delegate to such organization any one or more of
the functions for which it is responsible under this chapter; (15) Conduct its affairs in and outside of this state,
provided it shall maintain its offices, books, and records in the
location stated in its articles of incorporation as its principal
place of business. (B) The corporation may obtain, and continuously
maintain in
effect, reinsurance and a line of credit, each from
one or more
insurance companies or financial institutions and in
such amount
as determined by its board of directors. The
superintendent of
credit unions or the superintendent of
insurance may require the
corporation to obtain and maintain
reinsurance or a line of credit
but only in the event the
superintendent of credit unions or the
superintendent of
insurance first finds that such reinsurance or
line of credit is
actuarially or financially necessary. Such
determination shall
be made on a year-to-year basis. In the event of lapse of either reinsurance or the line of
credit of the corporation, the corporation shall immediately
notify the superintendent of credit unions, the superintendent of
insurance, the president of the senate, and the speaker of the
house of representatives, and shall confirm this communication in
writing. (C) All written communication with regulatory significance
from a credit union supervisory authority of another state to the
corporation shall be copied and such copy shall be sent by the
corporation to the superintendent of credit unions and the
superintendent of insurance within three days of receipt. (D) The corporation shall not publicly represent in any
manner that it is an agency of the state or federal government.
Any public representations of the corporation's status or legal
existence are further subject to rules adopted by the
superintendent of credit unions and the superintendent of
insurance. (E) The corporation shall submit its standard contract of
share guaranty, and any amendments thereto, to the superintendent
of credit unions and the superintendent of insurance annually.
The
contract of share guaranty shall reflect all terms governing
the
guarantee of payment of a credit union share account and
shall
constitute the policy of credit union share guaranty
insurance.
Sec. 1761.07. (A) Any credit union chartered by this
state
or any credit union chartered by a state that, as
described in
division (B) of this section, allows its credit
unions to be
eligible for participation in a credit union share
guaranty
corporation or any credit union chartered by the federal
government that, as described in division (C) of this section,
allows federally chartered credit unions to be eligible for
participation in a credit union share guaranty corporation is
eligible to participate in a credit union share guaranty
corporation under this chapter, subject to the following
conditions: (1) The board of directors of the credit union and the
board
of directors of the credit union share guaranty corporation
approve the participation; (2) The credit union satisfies the risk eligibility
standards established by the credit union share guaranty
corporation and applicable to all applying and participating
credit unions; (3) The credit union agrees to furnish financial
statements,
delinquent loan reports, and
such other information
considered
necessary by the credit union share guaranty
corporation to assess
the financial condition and performance of
the credit union; (4) The credit union agrees to be bound by the provisions
of
this chapter and the articles of incorporation and bylaws of
the
credit union share guaranty corporation; (5) Participation by the credit union would not result in
a
violation by the credit union share guaranty corporation of any
provision of this chapter or other applicable state or federal
law. (B) Credit unions chartered by other states qualify for
participation in the corporation, provided the following
conditions are satisfied: (1) Such participation is lawful under the laws of both
this
state and the domicile state of the credit union applying
for
participation in the corporation; (2) The credit union share guaranty corporation by
agreement
or law has sufficient authority to require the credit
union
applying for participation in the corporation to comply
with the
articles of incorporation and bylaws of the corporation,
and with
this chapter; (3) The credit union supervisory authority of such state
agrees to furnish to the credit union share guaranty corporation
copies of all financial and examination reports and other
information regarding participating credit unions as is necessary
to effect the corporation's purposes. If the credit union
supervisory authority is prohibited by law from disclosing
such
this information, the participating credit unions shall provide
the
information to the corporation. (C) Credit unions chartered by the federal government may
participate in the corporation, provided the following conditions
are satisfied: (1) The national credit union administration does not
restrict such participation; (2) Such participation is lawful under the laws of both
this
state, the domicile state of the credit union applying for
participation in the corporation, and the federal government; (3) The credit union share guaranty corporation by
agreement
or law has sufficient authority to require the credit
union
applying for participation in the corporation to comply
with the
articles of incorporation and bylaws of the corporation,
and with
this chapter; (4)
Participating
To the extent permitted by federal law or
regulation, participating credit unions insured by the national
credit union administration agree to furnish to the corporation
copies of all financial and examination reports and
such other
information regarding the participating credit unions as is
necessary to effect the corporation's purposes. (D) Any credit union that has
become
been admitted to
participation in the credit union share guaranty corporation in
accordance with the qualifications of this section shall have
referenced in their contract with the corporation all of the
appropriate conditions for participation and the manner in which
they
these conditions were satisfied. (E) Any credit union that has
become
been admitted to
participation in the corporation in accordance with the
qualifications of division (B) or (C) of this section shall have
the same privileges, benefits, and obligations of participation
as
those participating credit unions chartered under the laws of
this
state. (F) No credit union shall be admitted to participation in
the corporation unless it has paid in full its capital
contribution or any applicable premiums, fees, and assessments. (G) Notwithstanding any other provision of law to the
contrary, each participating credit union, which is otherwise
entitled to vote on any matters or action of the corporation
under
this chapter, Chapter 1701. or 1702. of the Revised Code,
or the
articles or bylaws of the corporation, shall be entitled
to cast
no more than one vote. (H) The right to participate issued by the corporation
shall
be nontransferrable and shall be exempt from the securities
laws
of this state.
Sec. 1761.08. (A)(1) In order to permit the credit union
share guaranty corporation to assess the financial condition and
performance of a credit union, upon the written request of the
corporation, the superintendent of credit unions or other credit
union supervisory authority or the national credit union
administration may furnish to the corporation a copy of unaudited
financial statements filed by a participating credit union or a
credit union making application to participate in the corporation
pursuant to divisions (B) and (C) of section 1733.32 of the
Revised Code or a comparable state or federal statute or of any
examination reports of the superintendent or other credit union
supervisory authority which were prepared pursuant to division
(A)
of section 1733.32 of the Revised Code or a comparable state
or
federal statute.
There (2) There shall be no liability on the part of,
and no cause
of action of any nature shall arise against this
state or any
state, the superintendent of credit unions or other
credit union
supervisory authority, or the national credit union
administration
for the release of any information furnished to
the corporation
pursuant to this division.
Such financial (3) Financial
statements and analyses furnished to the
corporation pursuant to
this division
(A) of this section are not
public documents, and the information
contained therein is
privileged and confidential to the
corporation for its sole use in
carrying out its statutory
functions. (B)(1) Each participating credit union shall submit
monthly
to the credit union share guaranty corporation
quarterly, or more
frequently as considered necessary by the corporation, a copy of
its
financial statements, delinquent loan report, and any other
such
information
as considered necessary by the credit union share
guaranty corporation in order to assess the financial performance
of the participating credit union. The corporation may require
that participating credit unions submit financial information in
the format required by the corporation.
(2) Financial statements submitted to the corporation by
participating credit unions pursuant to division (B)(1) of this
section are public documents. (C) Each participating credit union shall submit to the
credit union share guaranty corporation upon written request of
the corporation any other information as is necessary to effect
the corporation's purposes. (D)(1) In addition to other powers conferred in this chapter
a credit union share guaranty corporation may
do the following: (1)(a) Appoint an independent certified public accountant or
public accountant to prepare an audit report containing audited
financial statements together with such other information as the
corporation, in good faith, requires regarding the financial
condition of any participating credit union;
(2)(b) Upon notification to its participating credit union
and after notice to the superintendent of credit unions, or other
credit union supervisory authority, or the national credit union
administration, send a specialized employee to investigate the
operations of a participating credit union.
(3)(2) Costs and expenses for an audit report or special
investigation report under division (D)(1)(a) of this section
shall
be paid by the corporation.
(E)(1) Upon determination by the superintendent of credit
unions or the credit union share guaranty corporation that a
participating credit union is operating in an unsafe or unsound
manner, or that financial statements, delinquent loan reports,
and
other data received or examined by the corporation is
unreliable
or the participating credit union investment in the
corporation is
in excess of five per cent of the corporation's
fund, the
corporation shall require that an audit of the books
and records
of the participating credit union be conducted. The
audit shall
be completed in accordance with generally accepted
auditing
standards, and include such testing of the records
necessary to
render an opinion of an independent certified public
accountant.
If such (2) If the report, certificate, or opinion of the
independent accountant, as described in division (E)(1) of this
section, is in any way qualified, the corporation
shall require
the credit union to take such action as the
corporation considers
necessary to permit an independent
accountant to remove such
qualification from the report,
certificate, or opinion. If such
qualification is not remedied
within the time period designated,
the corporation shall report
such qualification in writing to the
superintendent within three
days thereof.
In (3) In addition
to other action described in this division,
the corporation may
do the following: (1)(a) Recommend appropriate corrective measures to the
operational policies and procedures of the participating credit
unions;
(2)(b) Make appropriate recommendations to the
superintendent
or appropriate credit union supervisory authority
or the national
credit union administration including the
recommendation that the
participating credit union be liquidated
or consolidated;
(3)(c) Submit reports and make recommendations to the
superintendent of credit unions, other credit union supervisory
authority, or the national credit union administration regarding
the financial condition of any participating credit union. Such
reports and recommendations are not public documents.
There
(4) There
shall be no liability on the part of, and no cause
of action of
any nature shall arise against, the corporation or
its
participating credit unions, directors, officers, employees,
or
agents, or the superintendent or other credit union supervisory
authority or the national credit union administration, for any
statements made by them in any reports or recommendations made in
accordance with
this division
(E) of this section. (F) When an examination or investigation of any
participating credit union is considered necessary for good cause
shown by the superintendent of credit unions under this chapter,
the corporation shall pay to the superintendent of credit unions
the cost thereof, including the salary or other compensation paid
to the persons making the examination or rendering special
services and overhead cost incurred in connection with the
examination or investigation as fixed by the superintendent. In
determining the costs of services or examinations, the
superintendent may use the estimated hourly cost for all persons
performing services for, or examinations of, the corporation for
the fiscal year. Travel expenses shall be paid by the division
of
financial institutions. (G) Neither the corporation nor any participating credit
union, as an agent of the corporation or of its participating
credit unions, or any other person shall use information obtained
under division (A), (B), (C), (D), or (E) of this section for any
purpose not authorized by this section. The conviction for
violation of this division by any person located outside this
state shall be reported to the appropriate credit union
supervisory authority or the national credit union administration
for prosecution under the laws of that jurisdiction.
Sec. 1761.09. (A) Each credit union share account of an
individual member
or, as described in division (B)(2) of section
1761.02 of the Revised Code, a nonmember of a participating credit
union shall be
guaranteed in amounts established from time to time
by the credit
union share guaranty corporation. Such primary
guaranteed amount
shall not be less than the amount of the credit
union share
account but, in no event, shall exceed two hundred
fifty thousand
dollars. (B) In addition to the primary guaranteed amount, the
corporation may establish an excess coverage guarantee for the
benefit of those participating credit unions that voluntarily
elect to obtain such additional guarantee. (C) The guarantees provided pursuant to this chapter do
not
apply to credit union share accounts until
such
the credit union
has applied for and been admitted as a participating credit
union,
and cease to apply to the share accounts of any credit
union upon
the later of any of the following: (1) The termination of the credit union's participation in
the corporation pursuant to section 1761.12 of the Revised Code; (2) The completion of the liquidation of the credit union; (3) The withdrawal of the credit union from participation
in
the corporation.
Sec. 1761.10. (A)(1) A credit union share guaranty
corporation shall establish and maintain a guarantee fund. The
fund shall be maintained at a normal operating level as defined
by
the board of directors of the corporation and approved by the
superintendent of insurance, except that the normal operating
level shall at all times be no less than one per cent of the
aggregate share capital of participating credit unions,
irrespective of how denominated. The fund of the corporation
shall be comprised of the following: (a) The account for each participating credit union; (b) Retained and undivided earnings; (c) Any reserves required by statute or order of the
superintendent of credit unions; (d) Borrowings made in accordance with section 3901.72 of
the Revised Code. (2)(a) Each participating credit union shall contribute to
and maintain with the corporation a capital contribution to be
credited to its account, in an amount equal to at least one per
cent of its aggregate share capital as is established as the
normal operating level of the fund by the board of directors
pursuant to division (A)(1) of this section and approved by the
superintendent of insurance. Each participating credit union's
account shall be adjusted annually to reflect changes in the
participating credit union's aggregate share capital in
accordance
with procedures adopted by the board of directors and
may be
adjusted more frequently if an increase in the aggregate
share
capital or a change in the financial condition of the
participating credit union warrants such adjustment. Those
credit
unions participating in excess coverage shall pay a
premium as
prescribed by the board of directors of the
corporation and as
filed and approved under Chapter 3937. of the
Revised Code. (b) The approval of the superintendent of insurance
concerning
the normal operating level of the guarantee fund
expires upon
written determination by the superintendent of
insurance that
there is cause for additions to the guarantee fund.
Such
This determination is not subject to any hearing requirement
under
Chapter 119. of the Revised Code, provided a credit union
guaranty corporation may request a supervisory conference under
section 1761.19 of the Revised Code. (3) If, at the close of a fiscal year, the guarantee fund
exceeds the normal operating level determined by the board of
directors of a credit union share guaranty corporation, the board
of directors may make a distribution of the excess to
participating credit unions. Any distribution shall be made to
each participating credit union in the proportion that each
participating credit union's account bears to the total aggregate
participating credit union accounts of the corporation. No
determination by the board of directors is effective until
approved by the superintendent of insurance. No distribution
shall be made, nor shall it confer any rights, until approved by
the superintendent of insurance. (4) The amount of the account of each participating credit
union shall be carried on the books of the individual participant
as a deposit with the corporation. (5) Notwithstanding any other provision of this chapter,
the
corporation shall require the participating credit unions to
make
capital contributions to maintain the normal operating level
set
by division (A)(1) of this section during any calendar year
in
which the fund has been reduced below the minimum operating
level
as a result of payment of any deficiencies in credit union
share
accounts. (B)(1) The corporation may annually or more frequently
levy
and collect additions to the capital contribution as the
board of
directors of the corporation considers appropriate. The
corporation shall notify the superintendent of credit unions and
the superintendent of insurance of such additions. Whenever the
superintendent of credit unions or the superintendent of
insurance
considers it necessary for the maintenance of the
normal operating
level of the fund,
he
the superintendent shall
order the
corporation to levy and collect additions to the capital
contributions. Such order shall specify the amount of the
addition and the reasons upon which the order is based. (2) The corporation shall send a written notice of capital
contributions required pursuant to division (B)(1) of this
section
to each participating credit union within ten days after
the levy
of any capital contributions. Capital contributions
shall be paid
to the corporation by each participating credit
union not later
than thirty days following mailing of written
notice of any
required capital contribution. (C)(1) In the event of potential impairment of the fund, a
special assessment of the fund may be levied by the corporation
with the approval of the superintendent of credit unions or the
superintendent of insurance. Impairment for this purpose is
deemed to exist when the corporation's liabilities and share
capital exceed its assets. Whenever the superintendent of credit
unions or the superintendent of insurance considers it necessary
to avoid an impairment of the fund,
he
the superintendent shall
order the
corporation to levy a special assessment. Such order
shall
specify the amount of the assessment and the reasons upon
which
the order is based. (2) The corporation shall send a written notice of the
special assessment required pursuant to division (C)(1) of this
section to each participating credit union within ten days after
the levy thereof. Special assessments shall be paid to the
corporation by each participating credit union not later than
thirty days following mailing of written notice of any special
assessment unless for good cause shown the time period is
extended. (D) A report of each capital contribution that may be
required pursuant to division (B) of this section shall be made
to
the superintendent of credit unions and the superintendent of
insurance within ninety days of the special assessment levy. A
report of each special assessment that
may be
is required pursuant
to division (C) of this section shall be made to the
superintendent of credit unions and the superintendent of
insurance within ten days after mailing the written notice
thereof
to participating credit unions. (E)(1) In the event any participating credit union fails
to
pay an annual capital contribution when due, the corporation
shall
report such default in writing to the superintendent of
credit
unions and the superintendent of insurance and the
appropriate
credit union supervisory authority or the national
credit union
administration within twenty-four hours of such
default, and shall
revoke after thirty days' notice the
participating credit union's
participation in the corporation,
unless good cause is shown for
the delay. (2) In the event any participating credit union fails to
pay
any additional capital contribution, premium, fee, or
assessment
when due, the corporation shall report such default in
writing to
the superintendent of credit unions and the
superintendent of
insurance and the appropriate credit union
supervisory authority
or the national credit union administration
within twenty-four
hours of such default, and shall revoke after
thirty days' notice
the participating credit union's
participation in the corporation,
unless good cause is shown for
the delay. (3) The thirty-day notice of revocation required under
divisions (E)(1) and (2) of this section does not apply to the
revocation of excess coverage. (F) Any participating credit union that is voluntarily
liquidated
or, any participating credit union that withdraws from
participation in the corporation and obtains a different form of
share guaranty or insurance pursuant to section 1733.041 of the
Revised Code or similar state statute, or any participating
credit
union that merges with another credit union that becomes
the
surviving credit union whose shares are guaranteed or insured
by a
different form of guaranty or insurance may be refunded in
an
amount equal to the balance of its capital contribution
account.
Such reimbursement of a participating credit union's
capital
contribution account balance shall be paid only if and
when the
guarantee fund exceeds its normal operating level as
calculated
without the account of the withdrawing credit union. (G) In the event of a merger of two or more participating
credit unions where the surviving credit union is to be insured
by
the corporation, the funds in the capital contribution account
of
each
such credit union shall be transferred to the account of
the
surviving credit union. (H) If a credit union share guaranty corporation is
dissolved, the net assets after settling any recorded,
contingent,
and contractual liabilities, and all costs of
dissolution shall be
distributed to the participating credit
unions in accordance with
their share balances, less any
outstanding debts owed to the
corporation.
Sec. 1761.13. (A) A credit union share guaranty
corporation
shall invest or deposit its funds in the following
manner: (1) In banks incorporated under the laws of this or any
other state, or the United States; (2) In negotiable certificates of deposit and bankers
acceptances; (3) In share certificates deposited in or any form of
evidence of interest or indebtedness of any credit union
organized
under Chapter 1733. of the Revised Code or comparable
state law if
insured, or whose member accounts are insured as
provided for by
Title II of the "Federal Credit Union Act," 84
Stat. 994, (1970),
12 U.S.C.A. 1781, as amended, or by comparable
insurance. No
investment under division (A)(3) of this section
shall be in a
participating credit union. (4) In accounts with, investment certificates or
withdrawable shares of, any savings and loan association that is
an insured institution as defined by Title IV of the "National
Housing Act," 48 Stat. 1255 (1934), 12 U.S.C.A. 1724, as amended. (5) In United
Sates
States government securities or United
States government agency obligations; (6) In bonds or other evidence of indebtedness rated in
the
three highest ratings of Standard and Poor's or Moody's
service,
not in default as to principal or interest, that are
valid
obligations issued, assumed, or guaranteed by any state,
county,
or municipal corporation of the United States; (7)
In bonds or other evidence of indebtedness rated in the
three highest ratings by Standard and Poor's or Moody's service,
not in default as to principal or interest, that are valid
obligations issued, assumed, or guaranteed by any corporation
incorporated under the laws of the United States or a state and
described in division (D)(1) of section 3925.08 of the Revised
Code. However, a credit union share guaranty corporation shall
not invest in any such corporate security containing any provision
of optionality, including, but not limited to, any derivative
security. (8) In any other investments that are expressly approved
by
the superintendent of credit unions and the superintendent of
insurance or are permitted by rules adopted by the
superintendents
pursuant to division (C) of section 1761.04 of
the Revised Code,
but such other investments shall not exceed
twenty per cent of the
sum of the capital contributions, retained and undivided earnings,
and any borrowings made in accordance with section 3901.72 of the
Revised Code of the corporation.
The superintendents shall not
permit the corporation to make any
investment in any unrelated
corporation or unrelated subsidiary
without the prior written
approval of the superintendent of
credit unions and the
superintendent of insurance. (B) The maximum investment in securities of any one
corporation shall not exceed ten per cent of the guarantee fund
at
the time the investment is made. (C) The corporation's directors, officers, committee
members, and employees, and immediate family members of such
individuals, are prohibited from receiving pecuniary or any other
type of consideration in connection with the making of an
investment or deposit by the corporation. (D) Within thirty days of appointment, each officer,
agent,
or employee having control or access to funds or
securities owned
by or pledged with a credit union share guaranty
corporation shall
be provided with fidelity bond coverage by the
corporation in an
amount commensurate with the risk involved. (E) The corporation shall not take a position in any
corporate stock without the express written approval of the board
of directors and the superintendent of credit unions and the
superintendent of insurance.
Section 2. That existing sections 1761.01, 1761.02, 1761.03,
1761.05, 1761.06, 1761.07, 1761.08, 1761.09, 1761.10, and 1761.13
of the Revised Code are hereby repealed.
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