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H. B. No. 652 As Reported by the Senate Insurance and Financial Institutions CommitteeAs Reported by the Senate Insurance and Financial Institutions Committee
130th General Assembly | Regular Session | 2013-2014 |
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Speaker Batchelder Representative Hackett
Cosponsors:
Representatives Brenner, Brown, Antonio, Barnes, Boyce, Buchy, Celebrezze, Fedor, Gerberry, Green, Hagan, C., Hall, Letson, Mallory, Milkovich, O'Brien, Reece, Retherford, Ruhl, Schuring, Sears, Sprague
Senator Kearney
A BILL
To amend sections 1761.05, 1761.06, 1761.08, 1761.09,
1761.10, 1761.12, 1761.13, and 1761.17 of the
Revised Code relative to the operation of credit
union share guaranty corporations, including with
respect to the primary guaranteed amount, license
renewals, reinsurance and lines of credit,
corrective action agreements with participating
credit unions, special premium assessments, and
investments.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1761.05, 1761.06, 1761.08, 1761.09,
1761.10, 1761.12, 1761.13, and 1761.17 of the Revised Code be
amended to read as follows:
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 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 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 1761.13 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, the superintendent shall specify all
reasons for the refusal or denial in 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 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 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 or before the anniversary date of the issuance of the
original license thirtieth day of June.
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, regulatory capital requirements, or
both;
(4) Upon the written order of the superintendent of credit
unions or other credit union supervisory authority, 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 or
other authority until its financial stability has been
reestablished to the satisfaction of the superintendent or other
authority, 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 and is
reasonably available to the corporation. 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. 1761.08. (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.
(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.
(3) Financial statements and analyses furnished to the
corporation pursuant to 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 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
information 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:
(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;
(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.
(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.
(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.
(3) In addition to other action described in this division,
the corporation may do the following:
(a) Recommend appropriate corrective measures to the
operational policies and procedures of the participating credit
unions;
(b) Enter into a written agreement of corrective action with
any participating credit union, which agreement may include the
superintendent or appropriate credit union supervisory authority
or the national credit union administration;
(c) 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;
(c)(d) 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.
(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 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 or the primary guaranteed amount insured by
the national credit union administration, whichever is greater.
(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 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.
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, if the superintendent of credit unions
and the superintendent of insurance approve 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, 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, 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)(1) The corporation may annually, or more frequently, levy
on and collect special premium assessments from participating
credit unions as the board of directors of the corporation
considers necessary when the guarantee fund has experienced, or is
expected to experience, a net loss for any one year, if the
superintendent of credit unions and the superintendent of
insurance approve of the special premium assessment.
(2) The corporation shall send a written notice of the
special premium assessment levied under division (D)(1) of this
section to each participating credit union within thirty days
after receipt of the approval of the superintendent of credit
unions and the superintendent of insurance to charge the
assessment. Special premium assessments shall be paid to the
corporation by each participating credit union not later than
thirty days after receipt of the notice of the assessment.
(3)(a) With the written approval of the superintendent of
insurance, the corporation may declare and pay a cash dividend to
those participating credit unions that are participating credit
unions as of the date of the declaration and that have paid
special premium assessments to the corporation. The amount of the
dividend allocable to a participating credit union shall be
determined based on the proportion of the special premium
assessments paid by the credit union as compared to the total of
all special premium assessments collected by the corporation.
(b) The superintendent shall approve or disapprove a
corporation's request for approval to pay a cash dividend as
provided in division (D)(3)(a) of this section within thirty days
after receiving the corporation's request for approval.
(E) 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 or special premium assessment
that is required pursuant to division (C) or (D) 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)(F)(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)(F)(1) and (2) of this section does not apply to the
revocation of excess coverage.
(F)(G) Any participating credit union that is voluntarily
liquidated, 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)(H) 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 credit union shall be transferred to the account of the
surviving credit union.
(H)(I) 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. 1761.12. (A) A credit union share guaranty corporation
may terminate the participation in the corporation of a
participating credit union for any of the following reasons:
(1) The participating credit union fails to satisfy the risk
eligibility standards established by the corporation and
applicable to all applying and participating credit unions;
(2) The participating credit union otherwise operates in an
unsafe and unsound manner as determined by the corporation;
(3) The participating credit union fails to furnish financial
statements, delinquent loan reports, or other information
considered necessary by the corporation under division (B) or (C)
of section 1761.08 of the Revised Code;
(4) The participating credit union fails to remedy in a
timely manner a qualification arising from an audit under division
(E) of section 1761.08 of the Revised Code;
(5) The participating credit union fails to pay when due a
capital contribution or applicable premium, fee, or assessment
under section 1761.10 of the Revised Code;
(6) The participating credit union fails to comply with any
provision of this chapter or, the articles of incorporation or
bylaws of the corporation, or any corrective action agreement
executed between the participating credit union and the
corporation;
(7) Continued participation would result in a violation of
this chapter or other applicable state or federal law by the
corporation.
(B)(1) The credit union share guaranty corporation shall, at
least thirty days prior to the effective date of any termination,
notify in writing the participating credit union to be terminated
and the superintendent of credit unions, any other credit union
supervisory authority, or the national credit union administration
of the pending termination and the reasons for such termination.
(2) The thirty-day notice of termination required under
division (B)(1) of this section does not apply to the termination
of excess coverage.
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 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 the common stock of any federal home loan bank of
which the corporation is a member, for the purpose of maintaining
a line of credit or source of liquidity through borrowings from
the bank, if the bank requires its members to purchase and hold
its common stock referred to as either of the following:
(a) Membership stock, subject to an annual adjustment made by
the bank based on the corporation's admitted total assets as
reported in its filings with the superintendent of insurance;
(b) Activity stock as may be required by the bank whenever
the corporation borrows from the bank and for as long as any of
those funds remain outstanding.
(9) 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 With the express written approval of the
board of directors and the superintendent of credit unions and the
superintendent of insurance, the corporation may invest in
publicly traded preferred and common stocks, as permitted by
section 3925.08 of the Revised Code, in an aggregate amount not to
exceed the corporation's statutory unassigned surplus as reduced
by its authorized control level risk-based capital.
Sec. 1761.17. (A) The superintendent of credit unions or the
superintendent of insurance may forthwith take possession of the
property and business of the credit union share guaranty
corporation and retain possession until the corporation satisfies
the superintendent that it will operate in conformity with this
chapter whenever it appears to the superintendent that the
corporation has done any of the following:
(1) Failed to pay the annual fee required by division (B) of
section 1761.04 of the Revised Code;
(2) Not paid deficiencies up to the maximum guaranteed amount
within the time frame set forth in section 1761.11 of the Revised
Code;
(3) Invested its funds in violation of section 1761.13 of the
Revised Code;
(4) Not collected required capital contributions or, special
assessments, or special premium assessments in accordance with
section 1761.10 of the Revised Code;
(5) Knowingly violated any cease-and-desist order;
(6) Neglected or refused to submit any item specifically
required by the superintendent under this chapter to the
inspection of any examiner or other agent of the superintendent.
(B) During the time the superintendent of credit unions
retains possession of the property and business of the corporation
pursuant to division (A) of this section, he the superintendent
shall perform the duties and carry out the obligations of the
corporation.
(C) Whenever the superintendent has taken possession of the
property and business of the corporation, if it considers itself
aggrieved thereby, the corporation may, within ten days after such
taking, apply to the common pleas court of Franklin county to
enjoin further proceedings. The court, after citing the
superintendent to show cause why further proceedings should not be
enjoined, and after a hearing and a determination of the facts
upon the merits, may dismiss such application or enjoin the
superintendent from further proceedings and direct him the
superintendent to surrender the property and business to the
corporation, or make such further order as may be just.
(D) An appeal may be taken from the judgment of the court by
the superintendent or by the corporation in the manner provided by
law for appeals from the judgment of a court of common pleas. An
appeal from the judgment of the court shall not operate as a stay
of the judgment unless the court, on good cause, so orders.
(E) Any action by the superintendent of insurance to take
possession of the property and business of a credit union share
guaranty corporation shall be under Chapter 3903. of the Revised
Code.
Section 2. That existing sections 1761.05, 1761.06, 1761.08,
1761.09, 1761.10, 1761.12, 1761.13, and 1761.17 of the Revised
Code are hereby repealed.
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