<section article="gfi" article_name="Financial Institutions" number="6-101" future_version_removed="true" title_number="6" title_name="Credit Unions" subtitle_number="1" subtitle_name="Definitions"> <level label="a"> <text>In this title the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Board” means the board of directors of a credit union.</text> </level> <level label="c"> <level label="1"> <text>“Branch” means a credit union office at which shares or deposits are received, share drafts or checks are paid, or money is lent.</text> </level> <level label="2"> <text>“Branch” includes a mobile branch or other special–purpose facility that performs a function of a branch.</text> </level> <level label="3"> <text>“Branch” does not include an automated teller machine as defined in § 1–401(d) of this article.</text> </level> </level> <level label="d"> <text>“Credit union” means a cooperative, nonprofit financial institution organized under this title to conduct business in the State.</text> </level> <level label="e"> <text>“Credit union service organization” means an entity formed to engage in activities that:</text> <level label="1"> <text>Are incidental to the conduct of the business of a credit union;</text> </level> <level label="2"> <text>Advance or facilitate the purposes of a credit union; and</text> </level> <level label="3"> <text>Primarily serve a credit union and its members.</text> </level> </level> <level label="f"> <level label="1"> <text>“Credit union share guaranty corporation” means a corporation engaged in the business of guaranteeing or insuring payment of a credit union share or deposit account.</text> </level> <level label="2"> <text>“Credit union share guaranty corporation” includes the Credit Union Insurance Corporation established under Title 7 of this article.</text> </level> </level> <level label="g"> <text>“Deposit account” means a balance held by a credit union on which a contractual rate of interest may be paid as a debt owed by the credit union to the depositor.</text> </level> <level label="h"> <text>“Fixed assets” includes land, buildings, leasehold improvements, furniture, fixtures, and equipment used in the conduct of the regular business of a credit union.</text> </level> <level label="i"> <text>“Member in good standing” means a member who:</text> <level label="1"> <text>Owns at least one share in a credit union;</text> </level> <level label="2"> <text>Is current on all credit obligations to the credit union; and</text> </level> <level label="3"> <text>Has not caused the credit union a credit or deposit loss that is currently outstanding.</text> </level> </level> <level label="j"> <text>“Officer” means any officer that a Maryland corporation is required or permitted to have under § 2–412 of the Corporations and Associations Article.</text> </level> <level label="k"> <text>“Official” means:</text> <level label="1"> <text>A director;</text> </level> <level label="2"> <text>A member of a credit committee; or</text> </level> <level label="3"> <text>A member of a supervisory committee.</text> </level> </level> <level label="l"> <text>“Out–of–state credit union” means:</text> <level label="1"> <text>A federal credit union with its main office in a state other than this State; or</text> </level> <level label="2"> <text>A credit union chartered and primarily regulated by another state.</text> </level> </level> <level label="m"> <text>“Share” or “share account” means a balance held by a credit union on which a dividend may be paid and which confers membership and voting rights on the member.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-201" title_number="6" title_name="Credit Unions" subtitle_number="2" subtitle_name="General Provisions"> <text>Except as otherwise indicated in this title, Titles 3 through 5 of this article do not apply to credit unions.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-202" title_number="6" title_name="Credit Unions" subtitle_number="2" subtitle_name="General Provisions"> <text>Credit unions are subject to the supervision of the Commissioner.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-203" title_number="6" title_name="Credit Unions" subtitle_number="2" subtitle_name="General Provisions"> <text>A credit union incorporated under the laws of this State, including its income, net worth, and other funds are exempt from all taxes imposed by this State or by any of its political subdivisions to the same extent as federal credit unions are exempt.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-204" title_number="6" title_name="Credit Unions" subtitle_number="2" subtitle_name="General Provisions"> <text>A credit union may exercise all the rights, privileges, and incidental powers necessary or appropriate to exercise its specific powers and to accomplish the purposes for which the credit union is organized.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-205" title_number="6" title_name="Credit Unions" subtitle_number="2" subtitle_name="General Provisions"> <text>This title shall be construed liberally to effectuate its purpose.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-206" title_number="6" title_name="Credit Unions" subtitle_number="2" subtitle_name="General Provisions"> <text>This title may be cited as the Maryland Credit Union Act.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-301" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>In this section, “organization” includes any trade, profession, club, union, religious congregation, society, association, fraternal group, or cooperative.</text> </level> <level label="b"> <text>Seven or more adult individuals, each of whom is a resident of this State, may act as incorporators to form a credit union under this subtitle with one of the following field of membership types:</text> <level label="1"> <text>Single common bond;</text> </level> <level label="2"> <text>Multiple common bond; or</text> </level> <level label="3"> <text>Community common bond.</text> </level> </level> <level label="c"> <level label="1"> <text>Except as otherwise provided in this subtitle, the following provisions shall govern the field of membership types.</text> </level> <level label="2"> <text>A single common bond credit union may serve one group of individuals all of whom as a common bond:</text> <level label="i"> <text>Belong to the same recognized organization;</text> </level> <level label="ii"> <text>Are employed by a single corporation or other person;</text> </level> <level label="iii"> <text>Are employed by a single corporation or other person with at least a 10% ownership interest in or by another single corporation or person;</text> </level> <level label="iv"> <text>Are employed by a single corporation or other person that is related to another person, such as by contract and possessing a strong dependency relationship; or</text> </level> <level label="v"> <text>Are employed by or attend the same school.</text> </level> </level> <level label="3"> <text>A multiple common bond credit union may serve one or more groups of individuals, as described in paragraph (2) of this subsection, as long as:</text> <level label="i"> <text>Within each group all individuals have a common bond of organization or occupation; and</text> </level> <level label="ii"> <text>Each group is within reasonable geographic proximity and has access to a branch of the credit union.</text> </level> </level> <level label="4"> <level label="i"> <text>Subject to the provisions of subparagraphs (ii) and (iii) of this paragraph and subsection (d) of this section, a community credit union may serve a group of individuals, all members of which, as a common bond, live, work, worship, or attend school within a single or two or more contiguous well-defined local communities, neighborhoods, rural districts, or counties.</text> </level> <level label="ii"> <text>If the common bond is within a single well-defined local community, neighborhood, rural district, or county, the total population at the time of the formation of the credit union may not exceed 300,000.</text> </level> <level label="iii"> <text>If the common bond is within two or more contiguous well-defined local communities, neighborhoods, rural districts, or counties, the total population at the time of the formation of the credit union may not exceed 200,000.</text> </level> </level> </level> <level label="d"> <text>Notwithstanding the provisions of subsection (c)(4) of this section, any credit union, without regard to its field of membership type, may include in its field of membership, without regard to location, a community, neighborhood, rural district, or county if:</text> <level label="1"> <text>The Commissioner determines that the community, neighborhood, rural district, or county is:</text> <level label="i"> <text>An “investment area” as defined in 12 U.S.C. § 4702(16) of the Community Development Banking and Financial Institutions Act of 1994; and</text> </level> <level label="ii"> <text>Underserved by other depository financial institutions based on data of the Commissioner, the federal credit union and banking regulatory agencies, or other data sources; and</text> </level> </level> <level label="2"> <text>The credit union establishes and maintains an office or branch in the community, neighborhood, rural district, or county at which credit union services are available within 2 years after the inclusion of the community, neighborhood, rural district, or county in the field of membership of the credit union.</text> </level> </level> <level label="e"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, only a group with fewer than 3,000 members, excluding individuals who are eligible under § 6-302(b)(4) or (5) of this subtitle, shall be eligible to be included in the membership of a multiple common bond credit union.</text> </level> <level label="2"> <text>The numerical limitation in paragraph (1) of this subsection does not apply with respect to a group:</text> <level label="i"> <text>That the Commissioner determines could not feasibly or reasonably establish a new single common bond credit union;</text> </level> <level label="ii"> <text>Transferred from another credit union in connection with:</text> <level label="1"> <text>A merger or consolidation approved by the Commissioner based on safety and soundness concerns; or</text> </level> <level label="2"> <text>A liquidation approved by the Commissioner; or</text> </level> </level> <level label="iii"> <text>Transferred through the merger or consolidation of two credit unions, both of which served the group immediately before the merger or consolidation.</text> </level> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-302" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>In this section, “immediate family relative” means:</text> <level label="1"> <text>A spouse;</text> </level> <level label="2"> <text>A child;</text> </level> <level label="3"> <text>A sibling;</text> </level> <level label="4"> <text>A parent;</text> </level> <level label="5"> <text>A grandparent;</text> </level> <level label="6"> <text>A grandchild;</text> </level> <level label="7"> <text>A stepparent;</text> </level> <level label="8"> <text>A stepchild;</text> </level> <level label="9"> <text>A step-sibling; or</text> </level> <level label="10"> <text>Any adopted relative.</text> </level> </level> <level label="b"> <text>A member of a credit union may be:</text> <level label="1"> <text>An individual who shares with other members of the credit union one of the common bonds within the field of membership types approved by the Commissioner;</text> </level> <level label="2"> <text>An employee of the credit union;</text> </level> <level label="3"> <text>An entity that is composed primarily of individuals who are eligible for membership;</text> </level> <level label="4"> <text>An individual living in the same residence and maintaining a single economic unit with an individual who is eligible for membership; and</text> </level> <level label="5"> <text>An immediate family relative of an individual who is eligible for membership.</text> </level> </level> <level label="c"> <text>A person that is eligible for membership under subsection (b) of this section becomes a member when the person:</text> <level label="1"> <text>Subscribes to and pays for at least one share; and</text> </level> <level label="2"> <text>Meets all of the other requirements of the bylaws of the credit union.</text> </level> </level> <level label="d"> <text>Once an individual who is eligible for membership under subsection (b)(4) or (5) of this section becomes a member, then an immediate family relative of the member is eligible to become a member.</text> </level> <level label="e"> <text>A member remains a member of a credit union until the member:</text> <level label="1"> <text>Chooses to withdraw from the membership of the credit union; or</text> </level> <level label="2"> <text>Is expelled by the board under § 6-319 of this subtitle.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-303" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <level label="1"> <text>Subject to the provisions of § 6-301(c) and (e) of this subtitle, a multiple common bond credit union may add to its field of membership a group of over 750 potential members, excluding individuals who are eligible for membership under § 6-302(b)(4) or (5) of this subtitle, if:</text> <level label="i"> <text>The members have approved the necessary amendment to the bylaws, as required under § 6-320(a) of this subtitle;</text> </level> <level label="ii"> <text>The credit union files with the Commissioner an application and any other documents that the Commissioner deems necessary to make a determination; and</text> </level> <level label="iii"> <text>The Commissioner determines that:</text> <level label="1"> <text>The credit union has not engaged in any material unsafe or unsound practice during the 1-year period preceding the date of filing the application;</text> </level> <level label="2"> <text>The credit union has adequate net worth;</text> </level> <level label="3"> <text>The credit union has the administrative capability to serve the potential members of the group and the financial resources to meet the need for additional staff and assets to serve the potential members of the group;</text> </level> <level label="4"> <text>Any potential harm that the expansion may have on any other credit union and its membership is clearly outweighed in the public interest by the probable beneficial effect of the expansion in meeting the convenience and needs of the potential members of the group;</text> </level> <level label="5"> <text>Formation of a separate credit union by the group is not practicable and consistent with reasonable safety and soundness standards; and</text> </level> <level label="6"> <text>The group is within reasonable geographic proximity to a branch of the credit union.</text> </level> </level> </level> <level label="2"> <text>Unless the Commissioner notifies the credit union that a different time period is necessary, within 60 days after the application is filed, the Commissioner shall notify the credit union of the determination on the application.</text> </level> </level> <level label="b"> <text>Subject to the provisions of § 6-301(c) and (e) of this subtitle, a multiple common bond credit union may add to its field of membership a group of 750 or less potential members, excluding individuals who are eligible under § 6-302(b)(4) or (5) of this subtitle, if:</text> <level label="1"> <text>The board approves the addition of the group;</text> </level> <level label="2"> <text>The credit union notifies the Commissioner in writing within 30 days after the board approves the addition of the group;</text> </level> <level label="3"> <text>The requirements of subsection (a)(1)(iii) of this section are met; and</text> </level> <level label="4"> <text>The addition of the group has not been disapproved by the Commissioner within 30 days of the notification required under item (2) of this subsection.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-304" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>A credit union may convert to another field of membership type, as described in § 6–301 of this subtitle, if:</text> <level label="1"> <text>The credit union:</text> <level label="i"> <text>Meets the common bond requirements of the proposed field of membership type; and</text> </level> <level label="ii"> <text>Files with the Commissioner an application and any other documents that the Commissioner deems necessary to make a determination on the application; and</text> </level> </level> <level label="2"> <text>The Commissioner determines that approval:</text> <level label="i"> <text>Is in the best interest of the existing and proposed memberships;</text> </level> <level label="ii"> <text>Provides a means for better service to the existing membership;</text> </level> <level label="iii"> <text>Is in accordance with sound credit union practices; and</text> </level> <level label="iv"> <text>Does not expose the funds of the existing members to unnecessary risk.</text> </level> </level> </level> <level label="b"> <text>Unless the Commissioner notifies the credit union that a different time period is necessary, within 120 days after the application is filed, the Commissioner shall notify the credit union of the determination on the application.</text> </level> <level label="c"> <level label="1"> <text>No less than 30 days before the effective date of the conversion, the credit union shall give notice of the conversion to all groups of potential members of the credit union that will be removed from the field of membership as a result of the conversion.</text> </level> <level label="2"> <text>On and after the effective date of the conversion, the credit union:</text> <level label="i"> <text>May not continue to serve groups within the field of membership of the credit union that no longer qualify for membership in the credit union as a result of the conversion; and</text> </level> <level label="ii"> <text>May continue to serve members of a group identified under item (i) of this paragraph who are members before the effective date of the conversion.</text> </level> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-305" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>The incorporators shall sign and acknowledge three copies of articles of incorporation.</text> </level> <level label="b"> <text>The articles of incorporation shall include:</text> <level label="1"> <text>The name and residential address of each incorporator;</text> </level> <level label="2"> <text>A statement that each incorporator is 18 years of age or older;</text> </level> <level label="3"> <text>A statement that the incorporators are associating to form a credit union under this title;</text> </level> <level label="4"> <text>The name of the credit union;</text> </level> <level label="5"> <text>The field of membership type as described in § 6-301 of this subtitle;</text> </level> <level label="6"> <text>The municipal area and county where the credit union is to be located;</text> </level> <level label="7"> <text>The par value of the shares of the credit union;</text> </level> <level label="8"> <text>The number of shares to which each incorporator subscribes;</text> </level> <level label="9"> <text>The name and address in the State of the resident agent of the credit union for purposes of service of process in accordance with the Maryland General Corporation Law; and</text> </level> <level label="10"> <text>The number of directors and the names and residential addresses of the individuals who will serve as directors on the board until their successors are elected and qualify.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-306" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>The incorporators shall adopt bylaws for the credit union and shall sign and acknowledge two copies of them.</text> </level> <level label="b"> <text>The bylaws of the credit union shall include:</text> <level label="1"> <text>The name and purpose of the credit union;</text> </level> <level label="2"> <text>Provisions for annual and special meetings of members and the manner of notification for and conduct of the meetings;</text> </level> <level label="3"> <text>The number of members that constitute a quorum and provisions that relate to voting;</text> </level> <level label="4"> <text>A detailed description of the field of membership;</text> </level> <level label="5"> <text>The qualifications for membership;</text> </level> <level label="6"> <text>The number of directors on the board and their powers and duties;</text> </level> <level label="7"> <text>The powers and duties of its credit committee, if any, and supervisory committee;</text> </level> <level label="8"> <text>The powers and duties of its officers;</text> </level> <level label="9"> <text>The number of and qualifications for directors emeriti, if any;</text> </level> <level label="10"> <text>The par value of its shares and the conditions for issuance, payment, transfer, and withdrawal;</text> </level> <level label="11"> <text>The conditions on which deposits may be received and withdrawn; and</text> </level> <level label="12"> <text>Provisions for determining and paying dividends on shares and interest on deposits.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-307" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>The incorporators shall:</text> <level label="1"> <text>File with the Commissioner for examination three copies of the articles of incorporation and two copies of the bylaws; and</text> </level> <level label="2"> <text>Pay to the Commissioner a fee of $500.</text> </level> </level> <level label="b"> <text>The Commissioner shall investigate and determine if:</text> <level label="1"> <text>The articles and bylaws are framed in accordance with law and are reasonable;</text> </level> <level label="2"> <text>The character, responsibility, and general fitness of the incorporators command confidence and warrant belief that the business of the proposed credit union will be conducted honestly and efficiently, in accordance with the intent of this title; and</text> </level> <level label="3"> <text>Allowing the proposed credit union to engage in business:</text> <level label="i"> <text>Will promote public convenience and advantage; and</text> </level> <level label="ii"> <text>Is expedient and desirable.</text> </level> </level> </level> <level label="c"> <text>After the investigation, the Commissioner may require any change in the articles of incorporation or bylaws that the Commissioner considers necessary.</text> </level> <level label="d"> <level label="1"> <text>Unless the Commissioner notifies the applicant that a different time period is necessary, within 120 days after the articles and bylaws are filed, the Commissioner shall sign, date, and endorse each copy of the articles and bylaws as “approved” or “refused”.</text> </level> <level label="2"> <text>If formation of the credit union is refused, the Commissioner shall notify the incorporators in writing of the reason for the refusal.</text> </level> <level label="3"> <text>If formation of the credit union is approved, the Commissioner shall:</text> <level label="i"> <text>Return to the incorporators two of the endorsed copies of the articles and one of the endorsed copies of the bylaws; and</text> </level> <level label="ii"> <text>Keep one of the endorsed copies of the articles and the bylaws.</text> </level> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-308" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>If the Commissioner approves the articles and bylaws, the incorporators shall file for record with the State Department of Assessments and Taxation one of the endorsed copies of the articles of incorporation.</text> </level> <level label="b"> <text>When the articles of incorporation are filed for record in accordance with the provisions of subsection (a) of this section, the credit union becomes a corporation.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-312" future_version_removed="true" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <text>In addition to the powers set forth elsewhere in this title, a credit union may:</text> <level label="1"> <text>Receive the shares and deposits of its members;</text> </level> <level label="2"> <text>Lend money to its members;</text> </level> <level label="3"> <text>Invest funds as provided in this title; and</text> </level> <level label="4"> <text>Undertake other activities that:</text> <level label="i"> <text>Are consistent with this title;</text> </level> <level label="ii"> <text>Relate to its purposes; and</text> </level> <level label="iii"> <text>Are authorized by its bylaws.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-309" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>When filing the articles of incorporation and bylaws with the Commissioner under § 6-307 of this subtitle, the incorporators shall file with the Commissioner an initial application on a form that the Commissioner requires.</text> </level> <level label="b"> <text>The initial application shall include:</text> <level label="1"> <text>The field of membership type requested;</text> </level> <level label="2"> <text>A detailed description of the field of membership;</text> </level> <level label="3"> <text>A mission statement;</text> </level> <level label="4"> <text>A detailed business plan that includes the items that the Commissioner reasonably requires; and</text> </level> <level label="5"> <text>Any other information that the Commissioner reasonably requires.</text> </level> </level> <level label="c"> <level label="1"> <text>In connection with an initial application and at any other time the Commissioner requests, each incorporator and director shall provide fingerprints for use by the Federal Bureau of Investigation and the Criminal Justice Information System Central Repository of the Department of Public Safety and Correctional Services to conduct criminal history records checks.</text> </level> <level label="2"> <text>Any incorporator or director required by this subsection to provide fingerprints shall pay any processing or other fee required by the Federal Bureau of Investigation or the Criminal Justice Information System Central Repository of the Department of Public Safety and Correctional Services.</text> </level> <level label="3"> <text>The fingerprinting and criminal history records check requirements shall apply to any other official or officer of the credit union as requested by the Commissioner.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-313" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>Notwithstanding any other provision of the laws or regulations of the State and subject to subsection (b) of this section, a credit union may engage in any additional activity, service, or other practice in which, under federal law or regulation, federal credit unions may engage, subject to the same conditions that federal law requires or allows as to federal credit unions.</text> </level> <level label="b"> <level label="1"> <text>A credit union shall provide the Commissioner with written notice at least 45 calendar days before engaging in any activity, service, or other practice authorized under subsection (a) of this section.</text> </level> <level label="2"> <text>The notice required under paragraph (1) of this subsection shall include a description of the proposed activity, service, or other practice, including:</text> <level label="i"> <text>The specific authority for the activity, service, or other practice; and</text> </level> <level label="ii"> <text>Any condition that federal law requires or allows as to federal credit unions.</text> </level> </level> <level label="3"> <text>The credit union may begin to perform the activity, service, or other practice on the first business day after the 45th calendar day from the date the Commissioner receives the notice under paragraph (1) of this subsection unless the Commissioner:</text> <level label="i"> <text>Specifies a different date; or</text> </level> <level label="ii"> <text>Prohibits the activity, service, or other practice.</text> </level> </level> </level> <level label="c"> <text>The Commissioner may extend the 45–day period under subsection (b)(3) of this section if the Commissioner determines that the credit union’s notice requires additional information or additional time for analysis.</text> </level> <level label="d"> <text>The Commissioner may prohibit a credit union from performing the activity, service, or other practice described in the notice provided under subsection (b) of this section if the Commissioner determines that performing the activity, service, or other practice would:</text> <level label="1"> <text>Adversely affect the safety and soundness of the credit union;</text> </level> <level label="2"> <text>Be detrimental to the welfare of the general economy of the State; or</text> </level> <level label="3"> <text>Be detrimental to the public interest or to credit unions.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-314" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>Without being required to take any action to perfect a lien, a credit union has a lien and a right to a setoff on the shares and deposits of a member in any individual, multiple party, or other type of account, including any dividends or interest payable on those shares or deposits, to the extent of any delinquency or default of the member on:</text> <level label="1"> <text>Any outstanding loan, whether or not matured, on which the member is liable to the credit union as maker, comaker, surety, or endorser; and</text> </level> <level label="2"> <text>Any dues, charges, fees, fines, or other amount payable by the member.</text> </level> </level> <level label="b"> <text>If a member resigns or is expelled, the credit union may cancel that member’s shares and apply their withdrawal value against any amount owed to the credit union by the member.</text> </level> <level label="c"> <text>A credit union may allow a withdrawal of a member’s shares or deposits without affecting the credit union’s lien or right to a setoff.</text> </level> <level label="d"> <text>A credit union may refuse to allow a withdrawal of a member’s shares or deposits to the extent of any delinquency or default of the member to the credit union.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-317" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <level label="1"> <text>The annual meeting of the members shall be held as provided by the bylaws and at the time and place that the board determines.</text> </level> <level label="2"> <text>Special meetings of members shall be held:</text> <level label="i"> <text>On order of the directors or the supervisory committee; or</text> </level> <level label="ii"> <text>At the request of 10 percent of the members.</text> </level> </level> <level label="3"> <text>Notice of each meeting shall be given as the bylaws provide.</text> </level> </level> <level label="b"> <level label="1"> <text>Each member in good standing has one vote, notwithstanding the number of shares that the member holds.</text> </level> <level label="2"> <text>A member may not vote by proxy. However, a member that is not an individual may be represented by an individual authorized in writing by the member to represent it.</text> </level> <level label="3"> <text>A member may not vote or hold office if the member is less than 18 years of age.</text> </level> </level> <level label="c"> <level label="1"> <text>At any meeting of the members, the members may:</text> <level label="i"> <text>Decide any question of interest to the credit union;</text> </level> <level label="ii"> <text>Except for any instance where, in the judgment of the board, it would result in damage to the credit union’s financial soundness or would otherwise force the board to abrogate their fiduciary responsibility, overrule any decision of the board; and</text> </level> <level label="iii"> <text>Amend the bylaws or articles of incorporation as provided in § 6-320 of this subtitle.</text> </level> </level> <level label="2"> <text>At the annual meeting of the members, the members shall elect directors, unless they are elected as provided in § 6-329 of this subtitle or as provided in the bylaws for mail balloting.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-318" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>The provisions of this section do not apply to:</text> <level label="1"> <text>An action authorized under § 6-329 or § 6-321 of this subtitle;</text> </level> <level label="2"> <text>A voluntary dissolution under § 6-804 of this title; or</text> </level> <level label="3"> <text>An authorization of compensation under § 6-331 of this subtitle.</text> </level> </level> <level label="b"> <text>The board of a credit union:</text> <level label="1"> <text>May authorize by resolution any question, proposal, or other matter requiring membership approval to be voted on by mail ballot; and</text> </level> <level label="2"> <text>Shall establish a sequence of dates by which the voting procedures are initiated and completed.</text> </level> </level> <level label="c"> <text>The secretary of the credit union shall mail to each member in good standing who is eligible to vote:</text> <level label="1"> <text>A printed ballot;</text> </level> <level label="2"> <text>An explanation of the question, proposal, or other matter to be voted on; and</text> </level> <level label="3"> <text>A postage pre-paid and pre-addressed return envelope.</text> </level> </level> <level label="d"> <text>Unless otherwise provided in this title, the printed ballot shall be mailed to each member in good standing who is eligible to vote, not more than 30 days nor less than 7 days before the date set by the board for the filing of the mail ballot.</text> </level> <level label="e"> <level label="1"> <text>The question, proposal, or other matter is adopted only if approved by a majority of the ballots timely received from the members eligible to vote and in good standing and voting.</text> </level> <level label="2"> <text>The credit union shall report the results of the mail ballot to the members.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-319" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>Subject to the applicable provisions of the bylaws, the board may expel any member of the credit union who:</text> <level label="1"> <text>Defaults on the payment of any monetary obligation to the credit union;</text> </level> <level label="2"> <text>Is convicted of a criminal offense involving dishonesty or breach of trust;</text> </level> <level label="3"> <text>Neglects or refuses to comply with the provisions of this title or of the bylaws of the credit union;</text> </level> <level label="4"> <text>Habitually neglects to pay debts or becomes insolvent or bankrupt; or</text> </level> <level label="5"> <text>Subject to the provisions of subsection (b) of this section, violates a written expulsion policy adopted by the board.</text> </level> </level> <level label="b"> <level label="1"> <text>The board shall post conspicuously at each office of the credit union a notice of any expulsion policy adopted by the board.</text> </level> <level label="2"> <text>A person expelled by the board may request a reconsideration of the expulsion.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-320" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <level label="1"> <text>The board may amend the articles of incorporation only if the members approve the amendment.</text> </level> <level label="2"> <level label="i"> <text>Except as provided in subparagraph (ii) of this paragraph, the board may amend the bylaws without approval of the members.</text> </level> <level label="ii"> <text>The board may amend the bylaws only with the approval of the members for any amendment that addresses one of the following subjects:</text> <level label="1"> <text>The manner or method by which a meeting of the members can be convened;</text> </level> <level label="2"> <text>Quorum requirements for a meeting of the members;</text> </level> <level label="3"> <text>The voting rights of members;</text> </level> <level label="4"> <text>Except as provided in § 6-303(b) of this subtitle, any change in the field of membership;</text> </level> <level label="5"> <text>Requirements for the number, classifications, qualifications, and term of office for directors;</text> </level> <level label="6"> <text>Procedures for removing directors;</text> </level> <level label="7"> <text>Procedures for filling vacancies on the board; and</text> </level> <level label="8"> <text>Any other issue as determined by the Commissioner.</text> </level> </level> </level> </level> <level label="b"> <text>At any meeting of the members, the members may amend the articles of incorporation or, may approve an amendment to the bylaws as provided in subsection (a)(2)(ii) of this section, if:</text> <level label="1"> <text>The notice of the meeting specifies the amendment to be considered; and</text> </level> <level label="2"> <text>Two-thirds of the members present vote for the amendment.</text> </level> </level> <level label="c"> <level label="1"> <text>An amendment to the articles of incorporation does not become effective until:</text> <level label="i"> <text>The amendment is approved by the Commissioner in writing no later than 60 days after the date of submission of the proposed amendment, unless the Commissioner and the credit union agree to a longer period of time; and</text> </level> <level label="ii"> <text>A copy of the amendment certified by the Commissioner is filed with the State Department of Assessments and Taxation.</text> </level> </level> <level label="2"> <text>Whether approved only by the board or by the members as required under subsection (a)(2)(ii) of this section, an amendment to the bylaws does not become effective until the amendment is approved by the Commissioner in writing no later than 60 days after the date of submission of the proposed amendment, unless the Commissioner and the credit union agree to a longer period of time.</text> </level> </level> <level label="d"> <text>The action of the Commissioner on the proposed amendment to the articles of incorporation or the bylaws under subsection (c)(1)(i) or (2) of this section shall be based on a finding as to whether or not the proposed amendment:</text> <level label="1"> <text>Is in the best interest of the membership;</text> </level> <level label="2"> <text>Provides means for better service to the membership;</text> </level> <level label="3"> <text>Is in accord with sound credit union practices; and</text> </level> <level label="4"> <text>Exposes the members’ funds to unnecessary risk.</text> </level> </level> <level label="e"> <text>The board shall report an amendment to the members of the credit union no later than the next meeting of the members after the Commissioner approves the amendment.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-321" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>The board:</text> <level label="1"> <text>By resolution may authorize an amendment to the bylaws or articles of incorporation to be voted on by mail ballot; and</text> </level> <level label="2"> <text>Shall establish a sequence of dates by which the voting procedures are initiated and completed.</text> </level> </level> <level label="b"> <text>The secretary of the credit union shall mail to each member in good standing:</text> <level label="1"> <text>A printed ballot;</text> </level> <level label="2"> <text>A copy of any old bylaw or article of incorporation affected by the proposed amendment; and</text> </level> <level label="3"> <text>A copy of the proposed bylaw or article of incorporation.</text> </level> </level> <level label="c"> <level label="1"> <text>The amendment is adopted only if approved by two-thirds of the mail ballots timely received from the members in good standing and voting.</text> </level> <level label="2"> <text>The credit union shall report the results of the mail ballot to the credit union members.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-324" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <text>The board shall have the authority and responsibility for the business affairs, funds, and records of a credit union.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-325" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>Each credit union shall have at least five directors.</text> </level> <level label="b"> <text>Each director:</text> <level label="1"> <text>Shall be a member of the credit union;</text> </level> <level label="2"> <text>Shall be bonded;</text> </level> <level label="3"> <text>May not have:</text> <level label="i"> <text>Defaulted on the payment of any monetary obligation to the credit union;</text> </level> <level label="ii"> <text>Been convicted of any criminal offense involving dishonesty or breach of trust;</text> </level> <level label="iii"> <text>Habitually neglected to pay debts;</text> </level> <level label="iv"> <text>Become insolvent or bankrupt; or</text> </level> <level label="v"> <text>Been removed by any state or federal regulatory agency from office as an officer, official, or employee of a financial institution; and</text> </level> </level> <level label="4"> <text>Shall comply with any other qualifications set forth in the credit union bylaws.</text> </level> </level> <level label="c"> <text>A director holds office for the term that the bylaws provide, which may not exceed 3 years, and until a successor is elected and qualifies.</text> </level> <level label="d"> <text>Each director shall take an oath that the director:</text> <level label="1"> <text>Will diligently and honestly perform the duties as director in administering the credit union’s affairs;</text> </level> <level label="2"> <text>Will remain responsible for the performance of the duties of the director even if the director delegates the performance of the duties; and</text> </level> <level label="3"> <text>Will not knowingly or willfully permit the violation of an applicable law or regulation.</text> </level> </level> <level label="e"> <text>The chairman and, if any, vice chairman of the board shall be elected by and from the directors.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-326" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>The office of a director becomes vacant if the director:</text> <level label="1"> <text>Dies;</text> </level> <level label="2"> <text>Resigns; or</text> </level> <level label="3"> <text>Is removed.</text> </level> </level> <level label="b"> <text>A director may be removed from office:</text> <level label="1"> <text>By the board, in accordance with the bylaws, if the director:</text> <level label="i"> <text>Does not possess or maintain the qualifications required to serve on the board; or</text> </level> <level label="ii"> <text>Is absent from three consecutive regular meetings of the board unless excused; or</text> </level> </level> <level label="2"> <text>By the members.</text> </level> </level> <level label="c"> <level label="1"> <text>Unless the bylaws provide otherwise, the remaining directors by majority vote shall fill a vacancy.</text> </level> <level label="2"> <text>A director elected by the board to fill a vacancy holds office as the bylaws provide.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-327" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>If the bylaws provide, a director emeritus may advise and consult with the board and aid the board in carrying out the board’s duties and responsibilities.</text> </level> <level label="b"> <text>The bylaws shall provide for:</text> <level label="1"> <text>The number of directors emeriti; and</text> </level> <level label="2"> <text>The qualifications for a director emeritus.</text> </level> </level> <level label="c"> <text>A director emeritus:</text> <level label="1"> <text>Shall be a member of the credit union; and</text> </level> <level label="2"> <text>May not be an officer or an official.</text> </level> </level> <level label="d"> <text>A director emeritus may not:</text> <level label="1"> <text>Participate in any board or committee deliberations;</text> </level> <level label="2"> <text>Make motions; or</text> </level> <level label="3"> <text>Vote on any matter before the board.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-328" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>In addition to any power or duty provided for by law, the board shall:</text> <level label="1"> <text>Act on each application for membership;</text> </level> <level label="2"> <text>Approve the amount of any blanket fidelity bond and any appropriate insurance or surety bond;</text> </level> <level label="3"> <text>Limit the number of shares or deposits that a member or depositor may hold;</text> </level> <level label="4"> <text>Limit the amount that the credit union may lend to any one member and establish the interest rate on all loans;</text> </level> <level label="5"> <text>Determine the interest rate on deposits and the manner of calculation;</text> </level> <level label="6"> <text>In the absence of a credit committee, appoint one or more loan officers and delegate to those officers the power to approve or disapprove loans and lines of credit in accordance with written policies established by the board;</text> </level> <level label="7"> <text>In the absence of a credit committee and upon written request of a member, review a loan application denied by a loan officer or establish a subcommittee of the board for this purpose;</text> </level> <level label="8"> <text>Fill any vacancy on the supervisory committee or, if any, a credit committee;</text> </level> <level label="9"> <text>Manage the investment of credit union funds in accordance with written investment policies established by the board;</text> </level> <level label="10"> <text>Set the amount of compensation for the president;</text> </level> <level label="11"> <text>Appoint standing or special committees, as necessary, to carry on the business of the credit union and prescribe conditions and limitations for any committee that the board appoints;</text> </level> <level label="12"> <text>Approve an annual operating budget for the credit union;</text> </level> <level label="13"> <text>Establish and adopt written policies necessary to implement the powers and duties of the credit union, including policies on:</text> <level label="i"> <text>Loans and lending;</text> </level> <level label="ii"> <text>Investments;</text> </level> <level label="iii"> <text>Employment and personnel;</text> </level> <level label="iv"> <text>Funds management;</text> </level> <level label="v"> <text>Collections;</text> </level> <level label="vi"> <text>Charge offs; and</text> </level> <level label="vii"> <text>Expulsion of members;</text> </level> </level> <level label="14"> <text>Make adequate provision for:</text> <level label="i"> <text>Investment losses;</text> </level> <level label="ii"> <text>The statutory reserve account;</text> </level> <level label="iii"> <text>Any special reserve account; and</text> </level> <level label="iv"> <text>The allowance for a loan and lease loss account;</text> </level> </level> <level label="15"> <text>Determine the amount, if any, that may be assessed for late fees or other charges;</text> </level> <level label="16"> <text>Delegate to the officers, employees, or committees duties as the board may deem appropriate;</text> </level> <level label="17"> <text>Establish and maintain a system of internal controls consistent with safety and soundness and generally accepted accounting principles; and</text> </level> <level label="18"> <text>Except for any instance where, in the judgment of the board, it would result in damage to the credit union’s financial soundness or would otherwise force the board to abrogate their fiduciary responsibility, perform every other duty that the members require.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to the provisions of paragraphs (2) and (3) of this subsection, the board may suspend a member of the supervisory committee.</text> </level> <level label="2"> <text>The suspension:</text> <level label="i"> <text>Shall be by a two-thirds vote of the board; and</text> </level> <level label="ii"> <text>Takes effect immediately and remains in effect until the board convenes a meeting of the members to vote on the suspension.</text> </level> </level> <level label="3"> <text>Immediately after the board votes to suspend a member of the supervisory committee, the board shall:</text> <level label="i"> <text>Call a meeting of the members, to be held no later than 15 days after the date of the suspension, for the purpose of voting on the suspension; and</text> </level> <level label="ii"> <text>Notify the Commissioner in writing about the suspension.</text> </level> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-329" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>Subject to the provisions of this section, the directors may be elected exclusively by mail ballot or electronically in accordance with regulations adopted by the Commissioner, if:</text> <level label="1"> <text>The board of the credit union, by resolution posted conspicuously at the principal office of the credit union at least 90 days before the annual meeting of the members of the credit union, authorizes the election of directors exclusively by mail ballot or electronically; or</text> </level> <level label="2"> <level label="i"> <text>The bylaws provide for the election of directors exclusively by mail ballot or electronically; and</text> </level> <level label="ii"> <text>Notice of the election and the annual meeting is posted conspicuously at the principal office of the credit union at least 90 days before the date of the annual meeting.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>At least 75 days before the annual meeting, the board of the credit union shall appoint a nominating committee of at least three members.</text> </level> <level label="2"> <text>The nominating committee shall nominate at least one member for each vacancy on the board, after determining that a proposed nominee agrees to permit the nomination and, if elected, to accept the office.</text> </level> <level label="3"> <text>The nominating committee shall file its nominations with the secretary of the credit union at least 60 days before the annual meeting.</text> </level> <level label="4"> <text>The secretary shall post these nominations conspicuously at the principal office of the credit union at least 55 days before the annual meeting.</text> </level> </level> <level label="c"> <level label="1"> <level label="i"> <text>The lesser of 1 percent or 500 of the members in good standing, but in any case no less than 20, may nominate candidates for directorships by signing a petition.</text> </level> <level label="ii"> <text>Each page of the petition shall include:</text> <level label="1"> <text>The name of the credit union; and</text> </level> <level label="2"> <text>The name of the nominee.</text> </level> </level> <level label="iii"> <text>Each petition shall contain:</text> <level label="1"> <text>The printed or typed names, signatures, date, and account numbers of those members in good standing signing the petition; and</text> </level> <level label="2"> <text>A certificate by each nominee that the nominee agrees to permit the nomination and, if elected, to accept the office.</text> </level> </level> <level label="iv"> <text>The nominating committee shall determine the validity of any petition.</text> </level> </level> <level label="2"> <text>Petitioners shall file their nomination with the secretary of the credit union at least 55 days before the annual meeting.</text> </level> <level label="3"> <text>The secretary shall post these nominations conspicuously at the principal office of the credit union at least 20 days before the annual meeting.</text> </level> </level> <level label="d"> <level label="1"> <text>When only one member is nominated for a position to be filled, the chairman may:</text> <level label="i"> <text>Take a voice vote; or</text> </level> <level label="ii"> <text>Declare the nominee elected by general consent or acclamation at the annual meeting.</text> </level> </level> <level label="2"> <text>If the nominations of the nominating committee and any petitioners provide more than one nominee for each directorship to be filled, the secretary:</text> <level label="i"> <text>For an election of directors conducted by mail ballot, shall mail to each member in good standing, at least 20 days before the annual meeting:</text> <level label="1"> <text>A printed ballot, clearly identified as a ballot, on which appears the name of each nominee, in alphabetical order, and on which, in the form that the board approves, may appear after a nominee’s name:</text> </level> <level label="A"> <text>A brief statement of the nominee’s qualifications and biographical information; and</text> </level> <level label="B"> <text>If applicable, a notation that the nominee is the incumbent;</text> </level> <level label="2"> <text>A postage prepaid and preaddressed envelope clearly marked with instructions to place the completed ballot and the identification form in the envelope and seal the envelope; and</text> </level> <level label="3"> <text>An identification form to be completed to include the name, address, signature, and credit union account number of the voter; and</text> </level> </level> <level label="ii"> <text>For an election of directors conducted electronically, shall provide the information and identification form required under item (i) of this paragraph as provided in regulations adopted by the Commissioner.</text> </level> </level> <level label="3"> <text>One form may be printed or provided electronically that represents a combined ballot and identification form.</text> </level> </level> <level label="e"> <text>The board shall appoint the tellers of the election.</text> </level> <level label="f"> <text>The tellers of an election may not count a ballot unless it is:</text> <level label="1"> <text>Mailed or electronically submitted to the tellers; and</text> </level> <level label="2"> <text>Received by the tellers not later than midnight of the 7th day before the date of the annual meeting.</text> </level> </level> <level label="g"> <text>The tellers of the election shall:</text> <level label="1"> <text>Verify or cause to be verified the name of each voter and the credit union account number of the voter as it appears on the identification form;</text> </level> <level label="2"> <text>Authenticate any questionable or challenged identification form;</text> </level> <level label="3"> <text>Keep the verified identification form and ballot for safekeeping pending the count of the vote;</text> </level> <level label="4"> <text>Keep separate any questionable or challenged identification form and ballot until the authentication, verification, or challenge is resolved;</text> </level> <level label="5"> <text>Determine that each eligible voter does not vote more than once and is a member in good standing; and</text> </level> <level label="6"> <text>After the time set in subsection (f)(2) of this section, tally the votes and report the results to the board.</text> </level> </level> <level label="h"> <text>The board shall report the results of the election at the annual meeting of the members.</text> </level> <level label="i"> <text>The Commissioner shall establish by regulation procedures for conducting an election of directors electronically, including procedures for:</text> <level label="1"> <text>Providing notice of the election to each member in good standing;</text> </level> <level label="2"> <text>Providing the information and identification form specified in subsection (d)(2)(i)1 of this section;</text> </level> <level label="3"> <text>Providing instructions on how to access and use the electronic election system; and</text> </level> <level label="4"> <text>Allowing a member to opt out of using the electronic election system and vote by mail ballot.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-330" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>Within 15 days after the annual meeting of the members and after the directors-elect have qualified, the board shall meet and elect the officers of the credit union.</text> </level> <level label="b"> <text>Unless the bylaws provide otherwise:</text> <level label="1"> <text>Each officer serves for a term of 1 year and until a successor is elected and qualifies; and</text> </level> <level label="2"> <text>The president shall be the chief executive officer who shall be responsible for the day to day operations of the credit union.</text> </level> </level> <level label="c"> <text>Subject to the provisions of an enforceable employment contract, if any, the board may remove an officer at any time.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-331" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>In this section, “compensation” means anything of value given to an official that is:</text> <level label="1"> <text>In exchange for services performed as an official; and</text> </level> <level label="2"> <text>Reportable as income to the Internal Revenue Service or the Comptroller of the State.</text> </level> </level> <level label="b"> <text>Each official is entitled to the compensation that:</text> <level label="1"> <text>Subject to the provisions of subsection (c) of this section, the members authorize; and</text> </level> <level label="2"> <text>Except as provided in subsection (d)(2) of this section, is approved by the Commissioner.</text> </level> </level> <level label="c"> <level label="1"> <text>All compensation to be paid under subsection (b) of this section shall be authorized by a vote of the members at the annual meeting of the membership in accordance with § 6–317 of this subtitle.</text> </level> <level label="2"> <text>Written disclosure of the proposed compensation and each official’s expenses shall be made to all members in good standing not less than 30 days and not more than 90 days before the annual meeting of members.</text> </level> <level label="3"> <text>The written disclosure required under paragraph (2) of this subsection shall contain at least the following information:</text> <level label="i"> <text>The proposed dollar amount of compensation that will be paid to each official on a per meeting or other applicable basis;</text> </level> <level label="ii"> <text>The aggregate dollar amount of compensation paid to all officials for the 12 months immediately preceding the date of the notice of the annual meeting of members;</text> </level> <level label="iii"> <level label="1"> <text>A reasonable estimate of the aggregate dollar amount of compensation to be paid to all officials for the following 12–month period assuming:</text> </level> <level label="A"> <text>That the proposed compensation is approved; and</text> </level> <level label="B"> <text>The same number of meetings as were held during the 12 months immediately preceding the date of the notice of the annual meeting of members; or</text> </level> <level label="2"> <text>A statement that the compensation to be paid to all officials will remain the same as it was during the 12 months immediately preceding the date of the notice of the annual meeting of members; and</text> </level> </level> <level label="iv"> <text>The aggregate dollar amount of all officials’ expenses, excluding compensation, for the 12 months immediately preceding the date of the notice of the annual meeting of members.</text> </level> </level> <level label="4"> <level label="i"> <text>The written disclosure shall be conspicuously set apart from other information provided to the members.</text> </level> <level label="ii"> <text>The written disclosure may be included in:</text> <level label="1"> <text>The notice of the annual meeting of the members;</text> </level> <level label="2"> <text>A separate mailing;</text> </level> <level label="3"> <text>A periodic statement of account; or</text> </level> <level label="4"> <text>A periodic publication of the credit union.</text> </level> </level> </level> </level> <level label="d"> <level label="1"> <text>All requests for the Commissioner’s approval under subsection (b) of this section shall:</text> <level label="i"> <text>Be made in writing; and</text> </level> <level label="ii"> <text>Contain a certification by the president of the credit union that the compensation has been authorized by the membership in accordance with subsection (c) of this section.</text> </level> </level> <level label="2"> <text>The Commissioner’s approval is not required if the credit union:</text> <level label="i"> <text>Was rated “1” or “2” as of the last examination conducted by the Commissioner; and</text> </level> <level label="ii"> <text>Has a positive net income as of the end of the previous calendar year.</text> </level> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-332" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>A board may call a special meeting of the members to act on a report or recommendation of the supervisory committee that concerns the suspension from office of a member of the credit committee, a director, or an officer.</text> </level> <level label="b"> <text>The notice of the special meeting shall be given within 7 days after the board receives the report or recommendation.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-333" title_number="6" title_name="Credit Unions" subtitle_number="3" subtitle_name="Formation, Organization, and Powers"> <level label="a"> <text>The board shall prepare a plan for educating each official as to the duties and responsibilities that accompany the official’s position.</text> </level> <level label="b"> <text>The education plan may include requiring an official to:</text> <level label="1"> <text>Read materials;</text> </level> <level label="2"> <text>Attend seminars, conferences, or workshops; or</text> </level> <level label="3"> <text>Review films or tapes.</text> </level> </level> <level label="c"> <text>The preparation of and compliance with an education plan developed under this section may not be construed to limit the civil or criminal liability of an official arising from an act or omission by the official in the performance of any duty or responsibility of the official.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-401" title_number="6" title_name="Credit Unions" subtitle_number="4" subtitle_name="Examinations and Reports"> <level label="a"> <text>Each credit union shall have a supervisory committee.</text> </level> <level label="b"> <text>The board shall appoint the members of the supervisory committee at:</text> <level label="1"> <text>The first meeting of the board following the annual meeting of the members; and</text> </level> <level label="2"> <text>Any time there is a vacancy.</text> </level> </level> <level label="c"> <level label="1"> <text>Subject to the provisions of paragraph (2) of this subsection, the board shall determine the number of members on the supervisory committee.</text> </level> <level label="2"> <text>The supervisory committee shall have at least three and not more than seven members.</text> </level> </level> <level label="d"> <level label="1"> <text>Each member of the supervisory committee shall be appointed from among the members of the credit union.</text> </level> <level label="2"> <text>Not more than one member of the supervisory committee may be a director.</text> </level> <level label="3"> <text>An officer of the credit union, a member of the credit committee, or an employee of the credit union may not be a member of the supervisory committee.</text> </level> <level label="4"> <text>At least one member of the supervisory committee shall have experience in:</text> <level label="i"> <text>Accounting;</text> </level> <level label="ii"> <text>Auditing; or</text> </level> <level label="iii"> <text>General business.</text> </level> </level> <level label="5"> <text>Each member of the supervisory committee:</text> <level label="i"> <text>Shall be bonded;</text> </level> <level label="ii"> <text>May not have been convicted of any criminal offense involving dishonesty or breach of trust;</text> </level> <level label="iii"> <text>May not have habitually neglected to pay any debts;</text> </level> <level label="iv"> <text>May not become insolvent or bankrupt while serving on the supervisory committee; and</text> </level> <level label="v"> <text>May not have been removed by the Commissioner or any state or federal regulatory agency as an officer, official, or employee of a financial institution.</text> </level> </level> </level> <level label="e"> <text>The members of the supervisory committee shall elect the chairman of the supervisory committee:</text> <level label="1"> <text>At the beginning of each term of appointment to the committee; and</text> </level> <level label="2"> <text>At any time there is a vacancy and the board is notified.</text> </level> </level> <level label="f"> <text>A member of the supervisory committee serves for 1 year and until a successor is appointed and qualifies.</text> </level> <level label="g"> <text>Each member of the supervisory committee shall take an oath to perform faithfully the duties of the office.</text> </level> <level label="h"> <level label="1"> <text>The board shall appropriate funds:</text> <level label="i"> <text>For an audit conducted by an outside auditor; and</text> </level> <level label="ii"> <text>If required, for an internal auditing function.</text> </level> </level> <level label="2"> <text>The supervisory committee has the sole authority to engage or terminate outside and internal auditors.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-402" title_number="6" title_name="Credit Unions" subtitle_number="4" subtitle_name="Examinations and Reports"> <level label="a"> <text>The supervisory committee is responsible for ensuring that the officials and officers:</text> <level label="1"> <text>Meet required financial reporting objectives; and</text> </level> <level label="2"> <text>Establish practices and procedures sufficient to safeguard members’ assets.</text> </level> </level> <level label="b"> <text>To meet its responsibilities, the supervisory committee shall determine whether:</text> <level label="1"> <text>Internal controls are:</text> <level label="i"> <text>Established and effectively maintained to achieve the credit union’s financial reporting objectives; and</text> </level> <level label="ii"> <text>Sufficient to satisfy the requirements of the supervisory committee audit, verification of members’ accounts, and the supervisory committee’s additional responsibilities;</text> </level> </level> <level label="2"> <text>The credit union’s accounting records and financial reports are promptly prepared and accurately reflect operations and results;</text> </level> <level label="3"> <text>The relevant plans, policies, and control procedures established by the board are properly administered; and</text> </level> <level label="4"> <text>The board’s plans, policies, and control procedures are sufficient to safeguard against error, carelessness, conflict of interest, self-dealing, and fraud.</text> </level> </level> <level label="c"> <level label="1"> <text>The supervisory committee shall submit:</text> <level label="i"> <text>A report on the annual audit to the board; and</text> </level> <level label="ii"> <text>A summary of the report on the annual audit to the members at the annual meeting of the members.</text> </level> </level> <level label="2"> <text>The supervisory committee shall conduct or cause to be conducted and shall submit to the board, supplementary audits as the supervisory committee deems necessary.</text> </level> <level label="3"> <text>The supervisory committee shall submit written reports periodically to the board addressing activities since the last report.</text> </level> </level> <level label="d"> <level label="1"> <text>The supervisory committee audit of a credit union shall occur at least once each calendar year and shall cover the period elapsed since the last audit period.</text> </level> <level label="2"> <text>The supervisory committee annual audit shall meet the following minimum guidelines:</text> <level label="i"> <text>A credit union with assets over $250,000,000 shall have an opinion audit of the credit union’s financial statements performed by an independent licensed certified public accountant; and</text> </level> <level label="ii"> <text>A credit union with assets of less than $250,000,000 may satisfy the audit requirements by:</text> <level label="1"> <text>An opinion audit of the credit union’s financial statements performed by an independent licensed certified public accountant;</text> </level> <level label="2"> <text>In accordance with the provisions of paragraph (3) of this subsection, an agreed upon procedures engagement performed by a qualified person with appropriate knowledge of auditing concepts and credit union procedures; or</text> </level> <level label="3"> <text>An audit performed by the supervisory committee or the credit union’s internal auditors.</text> </level> </level> </level> <level label="3"> <text>The following minimum procedures shall be satisfied under paragraphs (2)(ii)2 and (2)(ii)3 of this subsection:</text> <level label="i"> <text>Determine that the reserve fund is sufficient in accordance with § 6-703 of this title;</text> </level> <level label="ii"> <text>Determine that the credit union meets minimum net worth requirements in accordance with § 6-702 of this title;</text> </level> <level label="iii"> <text>Review and test the bank statement reconciliations by testing for mathematical accuracy and ensuring that reconciling items are reasonable and clear promptly;</text> </level> <level label="iv"> <text>Perform an unannounced cash count at some time during the period covered by the audit and ensure that the amount of cash counted agrees to the general ledger;</text> </level> <level label="v"> <text>Review a sufficient number of current and delinquent loans to determine whether or not they are in accordance with the credit union’s underwriting policies and procedures as established by the board;</text> </level> <level label="vi"> <text>Determine that the trial balance listing of loans agrees with the general ledger;</text> </level> <level label="vii"> <text>Determine that the allowance for the loan and lease loss account meets the minimum standards required under § 6-704 of this title;</text> </level> <level label="viii"> <text>Determine that all loans that are delinquent 60 days or more are reported to the board monthly;</text> </level> <level label="ix"> <text>Determine that the investment subsidiary or list of investments agrees with the general ledger by performing the following procedures:</text> <level label="1"> <text>Compare the balance of investments and accrued interest receivable from the subsidiary ledger to the general ledger;</text> </level> <level label="2"> <text>Choose a sample of investments and compare the market value per the subsidiary ledger to an outside source;</text> </level> <level label="3"> <text>Test the accrued interest and compare it to the subsidiary ledger;</text> </level> <level label="4"> <text>Test a sample of investment purchases or sales during the audit period for proper authorization to make sure that the accounting treatment is correct, compare the terms of the transactions to a broker advice, and make sure that the investment is in accordance with board policy; and</text> </level> <level label="5"> <text>Confirm all investments with any depository institution, broker, or third party safekeeping agent, or inspect the original certificate, if it is in the possession of the credit union;</text> </level> </level> <level label="x"> <text>Determine that the trial balance listing of shares and deposits agrees with the general ledger;</text> </level> <level label="xi"> <text>Perform a minimum of 20 share and deposit dividend and interest calculations paid during the audit period;</text> </level> <level label="xii"> <text>Obtain a list of all overdrawn share and deposit accounts and determine that management is attempting to collect these items;</text> </level> <level label="xiii"> <text>Obtain a listing of other asset and other liability accounts, make a selection of five of these accounts including any suspense or clearing accounts, and perform the following procedures:</text> <level label="1"> <text>Obtain reconciliations of the selected accounts and compare the balance to the general ledger;</text> </level> <level label="2"> <text>Test the mathematical accuracy of the reconciliation; and</text> </level> <level label="3"> <text>Determine whether any reconciling items have been outstanding for more than 30 days;</text> </level> </level> <level label="xiv"> <text>Perform a minimum of 20 loan interest calculations collected during the audit period;</text> </level> <level label="xv"> <text>Review the minutes of the board meetings to ensure that they document relevant decisions, including decisions about charged off loans, interest rate changes, policy changes, interest and dividend rates, personnel issues, and the annual budget; and</text> </level> <level label="xvi"> <text>Other auditing procedures as are deemed necessary by the board, the Commissioner, or the supervisory committee.</text> </level> </level> </level> <level label="e"> <level label="1"> <text>At least once every 2 years the supervisory committee or its designee shall verify the accounts of the members in accordance with paragraph (2) of this subsection.</text> </level> <level label="2"> <text>The verification shall be performed using one of the following methods:</text> <level label="i"> <text>A 100% verification of the share and loan accounts of all members;</text> </level> <level label="ii"> <text>A statistical sampling of member share and loan accounts done in connection with an opinion audit of the financial statements performed by a licensed certified public accountant; or</text> </level> <level label="iii"> <text>A statistical sampling method that provides a random selection that is expected to be representative of the membership.</text> </level> </level> </level> <level label="f"> <level label="1"> <text>A credit union with assets in excess of $250,000,000 shall have an internal audit function in accordance with paragraph (2) of this subsection.</text> </level> <level label="2"> <text>The supervisory committee shall:</text> <level label="i"> <text>Hire one or more internal auditors to assist the supervisory committee in the performance of the audit duties of the supervisory committee;</text> </level> <level label="ii"> <text>Adopt and execute an annual internal audit plan that adheres to board policies and includes:</text> <level label="1"> <text>An evaluation of internal controls; and</text> </level> <level label="2"> <text>Operational procedures; and</text> </level> </level> <level label="iii"> <text>Direct the duties of the internal auditor.</text> </level> </level> </level> <level label="g"> <text>Any agreement between the supervisory committee and an outside auditor shall be documented by an engagement letter that specifies the terms, conditions, and objectives of the arrangement.</text> </level> <level label="h"> <level label="1"> <text>All work performed by the supervisory committee, outside auditors, or internal auditors shall be documented by appropriate work papers.</text> </level> <level label="2"> <text>The Commissioner shall have access to the work papers for a period of up to 3 years after the completion of the audit procedure.</text> </level> </level> <level label="i"> <level label="1"> <text>At any time, by a unanimous vote, the supervisory committee may suspend a director, an officer, or a member of the credit committee for cause.</text> </level> <level label="2"> <level label="i"> <text>Subject to the provisions of subparagraph (ii) of this paragraph, the suspension will take effect immediately and stay in force until the board convenes a special meeting of the members to act on the suspension.</text> </level> <level label="ii"> <text>The meeting of the members shall take place no later than 15 days from the date of the vote to suspend, for the purpose of voting on the suspension.</text> </level> </level> <level label="3"> <text>The supervisory committee shall notify the Commissioner in writing immediately at the time of the suspension of the director, officer, or member of the credit committee.</text> </level> </level> <level label="j"> <text>The supervisory committee shall send promptly to the Commissioner a copy of the annual audit and all recommendations, charges, and significant findings that the supervisory committee presents to the board.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-403" title_number="6" title_name="Credit Unions" subtitle_number="4" subtitle_name="Examinations and Reports"> <level label="a"> <text>In this section, “examiner” means:</text> <level label="1"> <text>The Commissioner; and</text> </level> <level label="2"> <text>An individual whom the Commissioner designates as examiner.</text> </level> </level> <level label="b"> <text>An examiner shall visit each credit union and examine its business:</text> <level label="1"> <text>At least once during each calendar year, unless the Commissioner determines that, during a calendar year, an examination is unnecessary, in which event an examination shall occur no less frequently than once every 18 months;</text> </level> <level label="2"> <text>When requested by the board or supervisory committee of the credit union; and</text> </level> <level label="3"> <text>At any other time that the Commissioner considers necessary.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-404" title_number="6" title_name="Credit Unions" subtitle_number="4" subtitle_name="Examinations and Reports"> <level label="a"> <text>On or before March 31 of each year, each credit union shall report to the Commissioner on the business of the credit union during the preceding calendar year.</text> </level> <level label="b"> <text>The Commissioner may require any other reports from a credit union that the Commissioner considers necessary.</text> </level> <level label="c"> <text>Each report made under this section shall be:</text> <level label="1"> <text>On the form that the Commissioner provides; and</text> </level> <level label="2"> <text>Signed and acknowledged by:</text> <level label="i"> <text>A majority of the members of the supervisory committee; and</text> </level> <level label="ii"> <text>The president, vice-president, secretary, or treasurer of the credit union.</text> </level> </level> </level> <level label="d"> <text>If a credit union fails to make any report as required by this title, the credit union shall pay to the Commissioner $50 for each day that the report is overdue.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-405" title_number="6" title_name="Credit Unions" subtitle_number="4" subtitle_name="Examinations and Reports"> <level label="a"> <text>If the Commissioner finds that the supervisory committee of a credit union is not performing its duties properly, the Commissioner may require the credit union to have a certified public accountant audit the credit union for any period of time that the Commissioner considers necessary.</text> </level> <level label="b"> <text>The audit required under subsection (a) of this section shall be made at the expense of the credit union.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-406" title_number="6" title_name="Credit Unions" subtitle_number="4" subtitle_name="Examinations and Reports"> <level label="a"> <text>The board may call a meeting of the members of the credit union to act on any practice of the credit union that the supervisory committee considers unsafe or unauthorized.</text> </level> <level label="b"> <text>The board shall give the Commissioner advance notice of a meeting of the members that is called under subsection (a) of this section.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-407" title_number="6" title_name="Credit Unions" subtitle_number="4" subtitle_name="Examinations and Reports"> <text>In order to carry out the purposes of this title, the Commissioner may enter into cooperative and information sharing agreements with any other credit union supervisory agency.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-501" title_number="6" title_name="Credit Unions" subtitle_number="5" subtitle_name="Deposits and Dividends"> <text>As to each interest bearing or share account of each member or depositor in a credit union, the credit union shall generally make available to any member or depositor with an existing account, in addition to actually giving to the member or depositor, on the opening of the interest bearing or share account and, later, on demand of the member or depositor the following written notice:</text> <text>“Under Maryland law, all funds remaining in this interest bearing or share account become the property of this State after the account has been inactive for 3 years and notice is sent to the member or depositor at that member’s or depositor’s last known address. This account will be considered inactive if the member or depositor has not: (1) increased or decreased the amount in the account; (2) presented the passbook or other similar evidence of the account for the crediting of interest or dividends; (3) written to this credit union about the account; (4) engaged in any credit, share, or other deposit transaction with the credit union; or (5) otherwise indicated an interest in the account as evidenced by a memorandum on file with this credit union.”</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-502" title_number="6" title_name="Credit Unions" subtitle_number="5" subtitle_name="Deposits and Dividends"> <level label="a"> <level label="1"> <text>Except as otherwise provided in this section, the board may declare and pay dividends from its available net earnings or undivided earnings at the close of any accounting period after providing for accrued expenses and interest.</text> </level> <level label="2"> <text>Dividends paid or accrued are to be treated as an expense.</text> </level> </level> <level label="b"> <text>The board shall set the dividend rate and any terms and conditions regarding the dividend.</text> </level> <level label="c"> <text>A credit union may not declare a dividend:</text> <level label="1"> <text>Unless the required amount of earnings has been credited to the reserve fund of the credit union; or</text> </level> <level label="2"> <text>If the known losses at the close of a fiscal year would exceed the sum of the balances of the reserve fund, surplus, and undivided earnings after payment of the dividend.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-503" title_number="6" title_name="Credit Unions" subtitle_number="5" subtitle_name="Deposits and Dividends"> <level label="a"> <text>Any share drafts or checks provided directly or indirectly by a credit union for use in connection with a personal account shall have the numerical month and year in which the account was opened printed on the face of the drafts or checks, except as provided in subsection (b) of this section.</text> </level> <level label="b"> <text>The provisions of subsection (a) of this section shall not apply under the following conditions:</text> <level label="1"> <text>If an individual personal account is closed at a particular credit union and a joint personal account is opened at the same credit union that includes one of the customers who previously had the individual personal account, then the numerical month and year printed on the face of the share drafts or checks shall be the numerical month and year in which the individual personal account was established.</text> </level> <level label="2"> <text>If a joint personal account is closed at a particular credit union and an individual personal account is opened at the same credit union by one of the customers who previously was included under the joint account, then the numerical month and year printed on the face of the share drafts or checks shall be the numerical month and year in which the joint account was established.</text> </level> <level label="3"> <text>If a customer with an individual personal account or with a joint personal account opens an additional account at the same credit union, then the numerical month and year printed on the face of the share drafts or checks shall be the numerical month and year in which the initial account was established.</text> </level> <level label="4"> <text>In the case of a personal account that is closed and a new personal account opened simultaneously on the advice of the credit union, the share drafts or checks for the new account shall have the numerical month and year in which the closed account was originally opened printed on the face of the share drafts or checks.</text> </level> <level label="5"> <text>If the closed account was opened prior to July 1, 1987, a date is not required to be printed on the share drafts or checks.</text> </level> </level> <level label="c"> <text>A share draft or check provided on the opening of a personal account for use by the customer until printed share drafts or checks have been prepared is not required to have the numerical month and year in which the account was opened printed on the face of the share draft or check.</text> </level> <level label="d"> <level label="1"> <text>The credit union and the share draft or check printer may not be held liable for unintentional errors in the month and year printed on the face of the share draft or check.</text> </level> <level label="2"> <text>The customer may not be charged for the reprinting of the share drafts or checks when the share drafts or checks are reprinted due to error in the month and year printed on the face of the share draft or check.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-601" title_number="6" title_name="Credit Unions" subtitle_number="6" subtitle_name="Loans"> <level label="a"> <text>Subject to the provisions of this subtitle, a credit union may make loans and extend lines of credit to its members in accordance with written policies established by the board.</text> </level> <level label="b"> <text>Notwithstanding subsection (e) of this section, § 6-606(d) of this subtitle, and § 12-913.1 of the Commercial Law Article, on or after October 1, 1994, a revolving credit plan and extensions of credit under a revolving credit plan offered and extended by a credit union to a member are made under and are subject to Title 12, Subtitle 9 of the Commercial Law Article.</text> </level> <level label="c"> <text>Notwithstanding subsection (e) of this section, § 6-606(d) of this subtitle, and § 12-1013.1 of the Commercial Law Article, on or after October 1, 1994, a closed end loan made by a credit union to a member is made under and is subject to Title 12, Subtitle 10 of the Commercial Law Article.</text> </level> <level label="d"> <text>Except as provided in subsection (e) of this section and § 6-606(d) of this subtitle, and except as otherwise provided under the express terms of the agreement, note, or other evidence of an extension of credit or loan, the provisions of Title 12, Subtitle 1, 3, 4, 5, 6, 9, or 10 of the Commercial Law Article do not apply to an extension of credit or loan made by a credit union before October 1, 1994.</text> </level> <level label="e"> <level label="1"> <text>This subsection does not apply to an extension of credit or loan made by a credit union on or after October 1, 1994.</text> </level> <level label="2"> <text>Except as otherwise expressly provided in this title, a credit union may not charge interest on any loan to a member at a rate of more than 1.5% a month on the unpaid balance.</text> </level> <level label="3"> <text>Notwithstanding the provisions of paragraph (1) of this subsection, a credit union may charge interest on a loan to a member made on or after July 1, 1982, at 2% a month on the unpaid balance provided, with respect to the loan, that:</text> <level label="i"> <text>If the loan is a renewal or refinancing of a loan made prior to July 1, 1982, the lender complies with § 12-116 of the Commercial Law Article;</text> </level> <level label="ii"> <text>If the loan includes a provision for a rate of interest which may be adjusted by the lender during the term of the loan, the lender complies with § 12-118 of the Commercial Law Article;</text> </level> <level label="iii"> <text>Upon the borrower’s default, if the loan is secured by personal property, the lender complies with § 12-115 of the Commercial Law Article concerning repossession and redemption of the goods securing the loan;</text> </level> <level label="iv"> <text>If the loan is for the purchase of consumer goods, the loan contract complies with § 12-117 of the Commercial Law Article; and</text> </level> <level label="v"> <text>The loan does not include a balloon payment, unless payment in full is due on demand or in 1 year or less.</text> </level> </level> </level> <level label="f"> <text>Notwithstanding any provision of Title 12 of the Commercial Law Article, if the credit agreement provides, a credit union may make loans or extend credit to its members incorporating the same terms and conditions as a federal credit union is permitted under federal law and regulations relating to:</text> <level label="1"> <text>Over the limit fees for credit cards; and</text> </level> <level label="2"> <text>Fees for ancillary and administrative services requested by the member, including:</text> <level label="i"> <text>Researching account records;</text> </level> <level label="ii"> <text>Providing duplicate statements and other documents; and</text> </level> <level label="iii"> <text>Expedited issuance of a duplicate or original credit card or device.</text> </level> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-602" title_number="6" title_name="Credit Unions" subtitle_number="6" subtitle_name="Loans"> <level label="a"> <text>If the bylaws so provide, a credit union may have a credit committee.</text> </level> <level label="b"> <text>The board shall appoint the members of the credit committee.</text> </level> <level label="c"> <level label="1"> <text>Subject to the provisions of paragraph (2) of this subsection, the board shall determine the number of members on the credit committee.</text> </level> <level label="2"> <text>The credit committee shall have at least three and not more than seven members.</text> </level> </level> <level label="d"> <level label="1"> <text>Each member of the credit committee shall be appointed from among the members of the credit union.</text> </level> <level label="2"> <text>Not more than one member of the credit committee may be a director.</text> </level> <level label="3"> <text>The treasurer of the credit union may not be a member of the credit committee.</text> </level> </level> <level label="e"> <level label="1"> <text>At least one member of the credit committee shall have a minimum of 3 years experience in lending, credit, or general business.</text> </level> <level label="2"> <text>Each member of the credit committee:</text> <level label="i"> <text>Shall be a member of the credit union for the period of time required under the bylaws;</text> </level> <level label="ii"> <text>Shall be bonded;</text> </level> <level label="iii"> <text>May not have defaulted on the payment of any monetary obligation to the credit union;</text> </level> <level label="iv"> <text>May not have been convicted of any criminal offense involving dishonesty or breach of trust;</text> </level> <level label="v"> <text>May not have habitually neglected to pay any debts;</text> </level> <level label="vi"> <text>May not have been insolvent or bankrupt within 5 years of becoming a member and may not become insolvent or bankrupt while serving as a member; and</text> </level> <level label="vii"> <text>May not have been removed by the Commissioner or any state or federal regulatory agency as an officer, official, or employee of a financial institution.</text> </level> </level> </level> <level label="f"> <text>A member of the credit committee serves for 1 year and until a successor is appointed and qualifies.</text> </level> <level label="g"> <text>The credit committee shall fill any vacancy on the committee by appointing an individual to serve until the next regular meeting of the board.</text> </level> <level label="h"> <text>The members of the credit committee shall elect the chairman of the credit committee at the beginning of each term and at any other time that a vacancy may occur in the position of the chairman.</text> </level> <level label="i"> <text>The board shall remove any member of the credit committee who fails:</text> <level label="1"> <text>To attend three consecutive regular meetings of the credit committee without good cause; or</text> </level> <level label="2"> <text>To perform any of the duties of the office.</text> </level> </level> <level label="j"> <text>Each member of the credit committee shall take an oath to perform faithfully the duties of the office.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-603" title_number="6" title_name="Credit Unions" subtitle_number="6" subtitle_name="Loans"> <level label="a"> <level label="1"> <text>Except as provided in subsection (b) of this section, and in § 6-328 (7) and (8) of this title, a loan may not be made to any member of a credit union unless it is approved unanimously by those members of the credit committee who are present at a meeting that is attended by a majority of the members of the credit committee.</text> </level> <level label="2"> <text>If the bylaws of the credit union so provide, an applicant for a loan that is not approved by the credit committee may appeal to the board of directors.</text> </level> </level> <level label="b"> <level label="1"> <level label="i"> <text>The credit committee or the president may appoint loan officers.</text> </level> <level label="ii"> <text>The appointment of loan officers by the president shall be subject to confirmation by the credit committee.</text> </level> <level label="iii"> <text>The credit committee shall supervise loan officers and delegate to them the power to approve or disapprove loans in accordance with written instructions or policies adopted by the board.</text> </level> </level> <level label="2"> <text>Not more than one loan officer may be a member of the credit committee.</text> </level> <level label="3"> <text>A loan made by a loan officer in accordance with the written instructions or policies of the board does not have to be approved by the credit committee.</text> </level> <level label="4"> <level label="i"> <text>Each loan officer shall give the credit committee the record of each loan that the officer approves or disapproves within 7 days after a loan application is made.</text> </level> <level label="ii"> <text>The credit committee shall act on each loan application where the decision of the loan officer has been appealed by the credit union member.</text> </level> </level> <level label="5"> <text>A loan officer may not disburse credit union funds for any loan that the loan officer approved.</text> </level> </level> <level label="c"> <text>The credit committee shall meet as often as necessary.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-604" title_number="6" title_name="Credit Unions" subtitle_number="6" subtitle_name="Loans"> <text>The total of all loans made by a credit union directly or indirectly to any one member may not exceed 10 percent of the total assets of the credit union.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-605" title_number="6" title_name="Credit Unions" subtitle_number="6" subtitle_name="Loans"> <level label="a"> <text>A credit union may make a loan, including a business loan, to a member with or without security in accordance with the written lending policies established by the board that cover all secured and unsecured loans.</text> </level> <level label="b"> <text>A credit union may accept as security for a loan:</text> <level label="1"> <text>An endorsed note;</text> </level> <level label="2"> <text>A note secured by a lien on real, leasehold, or personal property;</text> </level> <level label="3"> <text>An assignment of shares or deposits in the credit union; or</text> </level> <level label="4"> <text>Any other kind of security that is approved by the Commissioner.</text> </level> </level> <level label="c"> <text>The Commissioner may review the lending policies of the credit union and order changes.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-606" title_number="6" title_name="Credit Unions" subtitle_number="6" subtitle_name="Loans"> <level label="a"> <text>Subject to § 6–606.1 of this subtitle, a credit union may make a loan to a member that is secured by real or leasehold property in accordance with written real estate lending policies established by the board as provided in this section.</text> </level> <level label="b"> <text>A loan under this section shall be:</text> <level label="1"> <text>Secured by a deed of trust or mortgage on real or leasehold property; and</text> </level> <level label="2"> <text>Amortized over a period of 30 years or less.</text> </level> </level> <level label="c"> <text>The Commissioner may review the lending policies of the credit union and order changes.</text> </level> <level label="d"> <level label="1"> <text>This subsection does not apply to an extension of credit or loan made by a credit union on or after October 1, 1994.</text> </level> <level label="2"> <text>A loan under this section that is secured by a first mortgage may be made at any rate of interest that does not exceed the rate authorized by Title 12, Subtitle 1 of the Commercial Law Article for mortgage loans.</text> </level> <level label="3"> <text>A loan under this section that is secured by a second mortgage may be made at any rate of interest that does not exceed the rate authorized by Title 12, Subtitle 4 of the Commercial Law Article.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-606.1" title_number="6" title_name="Credit Unions" subtitle_number="6" subtitle_name="Loans"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Conventional home mortgage loan” has the meaning stated in § 11–501 of this article.</text> </level> <level label="3"> <text>“Dwelling” has the meaning stated in § 11–501 of this article.</text> </level> <level label="4"> <text>“Shared appreciation agreement” has the meaning stated in § 11–501 of this article.</text> </level> </level> <level label="b"> <level label="1"> <text>This subsection applies only to a conventional home mortgage loan that is not already required by law or regulation by the State or federal government to be assumable in connection with the granting of absolute divorce.</text> </level> <level label="2"> <text>A credit union shall include in any conventional home mortgage loan a provision authorizing any of the existing borrowers to purchase the property interest of another borrower on the loan by assuming the seller’s portion of the mortgage if:</text> <level label="i"> <text>The assumption is in connection with the granting of a decree of absolute divorce; and</text> </level> <level label="ii"> <text>The credit union determines that the assuming borrower qualifies for the loan.</text> </level> </level> </level> <level label="c"> <text>A credit union shall disclose an assumption provision in any conventional home mortgage loan in writing to a loan applicant before the completion of the loan application.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-607" title_number="6" title_name="Credit Unions" subtitle_number="6" subtitle_name="Loans"> <level label="a"> <text>Subject to the provisions of subsection (b) of this section, a credit union may participate with a depository financial institution or a credit union service organization for purposes of making a loan to a credit union member in accordance with the lending policies of the board.</text> </level> <level label="b"> <text>A credit union may participate in a loan under subsection (a) of this section provided that the credit union that originates the loan retains an interest of at least 10% of the face amount of the loan.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-608" title_number="6" title_name="Credit Unions" subtitle_number="6" subtitle_name="Loans"> <text>A credit union may make a loan that is insured or guaranteed by the federal government, a state government or local government, or a unit of the federal government or of any state or local government.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-609" title_number="6" title_name="Credit Unions" subtitle_number="6" subtitle_name="Loans"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Eligible obligation” means a loan or a group of loans made to a member of a credit union by a lender other than the credit union to which the member belongs.</text> </level> <level label="3"> <text>“Student loan” means a loan that is:</text> <level label="i"> <text>Granted to finance the borrower’s attendance at an institution of higher education or at a vocational school; and</text> </level> <level label="ii"> <text>Secured by, and on which payment of the outstanding principal and interest has been deferred in accordance with, the insurance or guarantee of the federal government, a state government, or a unit of the federal government or of a state government.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>Subject to the provisions of paragraph (2) of this subsection, a credit union may purchase, in whole or in part, in accordance with the board’s purchase policies:</text> <level label="i"> <text>Eligible obligations of its members;</text> </level> <level label="ii"> <text>Eligible obligations of the individual members of a liquidating credit union, from the liquidating credit union;</text> </level> <level label="iii"> <text>Student loans if the credit union is granting student loans on an ongoing basis and if the purchase will facilitate the credit union’s packaging of a pool of the loans to be sold or pledged on the secondary market; and</text> </level> <level label="iv"> <text>Real estate loans if the credit union is granting real estate loans under this subtitle on an ongoing basis and if the purchase will facilitate the credit union’s packaging of a pool of the loans to be sold or pledged on the secondary mortgage market.</text> </level> </level> <level label="2"> <text>A credit union may make a purchase under paragraph (1) of this subsection if:</text> <level label="i"> <text>The board or investment committee approves the purchase;</text> </level> <level label="ii"> <text>A written agreement and a schedule of the eligible obligations covered by the agreement are retained by the credit union for inspection;</text> </level> <level label="iii"> <text>The aggregate of the unpaid balance of eligible obligations purchased under paragraph (1)(i) and (ii) of this subsection does not exceed 5% of the total assets of the credit union; and</text> </level> <level label="iv"> <text>For purchases of real estate loans under paragraph (1)(iv) of this subsection, the pool of loans to be sold or pledged on the secondary mortgage market:</text> <level label="1"> <text>Includes a substantial portion of the credit union’s members’ real estate loans, but no less than 20% of the aggregate principal amount of the loans purchased; and</text> </level> <level label="2"> <text>Is sold promptly, but no later than 6 months after the purchase.</text> </level> </level> </level> </level> <level label="c"> <text>A credit union may sell or pledge, in whole or in part, the eligible obligations or loans purchased under subsection (b)(1) of this section if:</text> <level label="1"> <text>The board or investment committee approves the sale or pledge; and</text> </level> <level label="2"> <text>The written agreement covering the sale or pledge and a schedule of the eligible obligations or loans covered by the agreement are retained by the credit union for inspection.</text> </level> </level> <level label="d"> <text>A credit union may agree to service any eligible obligation the credit union purchases or sells in whole or in part.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-610" title_number="6" title_name="Credit Unions" subtitle_number="6" subtitle_name="Loans"> <level label="a"> <level label="1"> <text>A credit union may make a loan to an official of the credit union if the official takes no part in consideration of the loan application.</text> </level> <level label="2"> <text>A loan authorized under paragraph (1) of this subsection requires approval of the board if:</text> <level label="i"> <text>The official is the debtor in the loan or is the guarantor, endorser, or cosigner of the loan; and</text> </level> <level label="ii"> <text>The loan, standing alone or when added to the aggregate of all outstanding loans for which the official is the debtor or acts as guarantor, endorser, or cosigner, or both, exceeds $25,000 plus pledged shares.</text> </level> </level> </level> <level label="b"> <text>The rates, terms, and conditions on any loan from a credit union to, or guaranteed, endorsed, or cosigned by, an official or officer of the credit union may not be more favorable than the rates, terms, and conditions for a comparable loan to another member of the credit union.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-611" title_number="6" title_name="Credit Unions" subtitle_number="6" subtitle_name="Loans"> <text>A credit union may not make a loan to any person except:</text> <level label="1"> <text>A member of the credit union;</text> </level> <level label="2"> <text>Another credit union; or</text> </level> <level label="3"> <text>A credit union service organization.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-701" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <level label="a"> <text>Each credit union incorporated under the laws of this State shall:</text> <level label="1"> <text>Participate in and have its member accounts insured under the National Credit Union Administration Share Insurance Program; or</text> </level> <level label="2"> <text>Participate in and have its member accounts insured by a credit union share guaranty corporation that is approved by the Commissioner to at least the same extent and amount as provided by the National Credit Union Administration Share Insurance Program.</text> </level> </level> <level label="b"> <level label="1"> <text>The Commissioner may examine any credit union share guaranty corporation that insures the member accounts of a credit union that is subject to this title.</text> </level> <level label="2"> <text>The Commissioner may charge the reasonable cost of an examination conducted under paragraph (1) of this subsection to the credit union share guaranty corporation that is examined.</text> </level> </level> <level label="c"> <text>A credit union share guaranty corporation, its members, and persons who have share and deposit accounts in credit unions are not subject to the provisions of the Insurance Article as a result of any of the activities of the credit union share guaranty corporation under this title.</text> </level> <level label="d"> <text>A credit union may not voluntarily terminate its insurance with the National Credit Union Administration Share Insurance Program or a credit union share guaranty corporation without prior approval of the Commissioner.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-702" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <text>A credit union is subject to the provisions of 12 C.F.R., Part 702 (Prompt Corrective Action) and 12 U.S.C. § 1790d (Net Worth Provisions).</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-703" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <level label="a"> <text>In this section, “risk assets” means a credit union’s total loans outstanding to its members.</text> </level> <level label="b"> <level label="1"> <text>Each credit union shall have a reserve fund to meet losses on loans and to meet other contingencies that the Commissioner specifies.</text> </level> <level label="2"> <text>The reserve fund may be distributed to the members of the credit union only on dissolution of the credit union.</text> </level> </level> <level label="c"> <level label="1"> <text>After paying organization expenses, each credit union shall credit to its reserve fund all entrance fees, transfer fees, and fines.</text> </level> <level label="2"> <text>A credit union in operation for 4 years or more and having assets of $500,000 or more shall credit to the reserve fund, at the end of each accounting period:</text> <level label="i"> <text>10 percent of its gross income until the reserve fund equals 4 percent of its risk assets; and</text> </level> <level label="ii"> <text>Then, 5 percent of its gross income until the reserve fund equals 6 percent of its risk assets.</text> </level> </level> <level label="3"> <text>A credit union in operation for less than 4 years or having assets of less than $500,000 shall credit to the reserve fund, at the end of each accounting period:</text> <level label="i"> <text>10 percent of its gross income until the reserve fund equals 7.5 percent of its risk assets; and</text> </level> <level label="ii"> <text>Then, 5 percent of its gross income until the reserve fund equals 10 percent of its risk assets.</text> </level> </level> <level label="4"> <text>On recommendation of the board, the amount credited to the reserve fund may be increased.</text> </level> </level> <level label="d"> <text>If the reserve fund falls below the amounts required by subsection (c)(2) or (3) of this section, it shall be restored by regular contributions.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-704" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <level label="a"> <text>A credit union shall maintain an allowance for loan and lease loss account in accordance with generally accepted accounting principles.</text> </level> <level label="b"> <text>The balance of the allowance for loan and lease loss account shall include coverage for:</text> <level label="1"> <text>Individually classified loans; and</text> </level> <level label="2"> <text>The historical reserve needs of the credit union.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-705" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <level label="a"> <text>The assets of a credit union that are not committed for loans may be invested in:</text> <level label="1"> <text>General obligations of or obligations guaranteed by the United States;</text> </level> <level label="2"> <text>Deposits, loans, shares, or stock of any federal reserve bank, federal home loan bank, or any central liquidity facility established under state or federal law;</text> </level> <level label="3"> <text>Securities, obligations, or other instruments of or issued by or fully guaranteed as to principal and interest by the federal government or a unit of the federal government;</text> </level> <level label="4"> <text>General obligations of a state or a federal territory or political subdivision, provided that the general obligation is rated in one of the three highest rating categories of a nationally recognized statistical rating organization as determined by the Commissioner;</text> </level> <level label="5"> <text>Deposits or federal funds of any financial institution that has federal deposit insurance;</text> </level> <level label="6"> <text>Shares or deposits of other credit unions;</text> </level> <level label="7"> <text>Mutual funds that invest solely in investments permissible for direct investment by the credit union;</text> </level> <level label="8"> <text>Repurchase transactions secured by investments permissible for direct investment by the credit union; or</text> </level> <level label="9"> <text>Any other investment that the Commissioner approves.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to the provisions of paragraph (2) of this subsection, in addition to the investments authorized under subsection (a) of this section, a credit union may request authority from the Commissioner to make other investments, including investments authorized under the federal Credit Union Act or regulations of the National Credit Union Administration, on an ongoing basis.</text> </level> <level label="2"> <text>To obtain the Commissioner’s approval for additional investment authority under paragraph (1) of this subsection, a credit union shall submit to the Commissioner an investment policy.</text> </level> </level> <level label="c"> <text>The Commissioner may review the investment policies of the credit union and order changes.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-706" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <level label="a"> <level label="1"> <text>With the prior approval of the Commissioner, as required under subsection (b) of this section, a credit union may organize a credit union service organization.</text> </level> <level label="2"> <text>A credit union that proposes to organize a credit union service organization shall:</text> <level label="i"> <text>File with the Commissioner a notice of intention to organize a credit union service organization; and</text> </level> <level label="ii"> <text>Submit to the Commissioner any information the Commissioner requires in order to evaluate the proposed credit union service organization.</text> </level> </level> <level label="3"> <text>In deciding whether to approve the organization of a credit union service organization, the Commissioner shall consider whether:</text> <level label="i"> <text>The organization of the credit union service organization will promote the convenience of the members of the credit union;</text> </level> <level label="ii"> <text>The credit union has sufficient net worth to support the credit union service organization; and</text> </level> <level label="iii"> <text>The credit union generally is operating in compliance with the provisions of this title.</text> </level> </level> <level label="4"> <text>Unless the Commissioner notifies the credit union that a different time period is necessary, within 60 days of receipt of the notice specified in paragraph (2) of this subsection, the Commissioner shall notify the credit union of the determination on the approval of the organization of a credit union service organization.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to the provisions of this subsection, a credit union may invest in and make loans to a credit union service organization.</text> </level> <level label="2"> <text>If an investment or loan by a credit union to a credit union service organization causes the aggregate of the credit union’s investments or loans to exceed 2% of the credit union’s total assets, the credit union shall:</text> <level label="i"> <text>Notify the Commissioner as provided in paragraph (3) of this subsection; and</text> </level> <level label="ii"> <text>Receive the prior approval of the Commissioner for any investment in or loan to the credit union service organization that exceeds the limit imposed under this paragraph.</text> </level> </level> <level label="3"> <text>A credit union that proposes to make any investment in or loan to the credit union service organization that exceeds the limit under paragraph (2) of this subsection shall:</text> <level label="i"> <text>File with the Commissioner a notice of intention to exceed the limit; and</text> </level> <level label="ii"> <text>Submit to the Commissioner any information the Commissioner requires in order to evaluate the proposed intention to exceed the limit.</text> </level> </level> <level label="4"> <text>In deciding whether to approve the investment or loan, the Commissioner shall consider whether:</text> <level label="i"> <text>The investment or loan will promote the convenience of the members of the credit union;</text> </level> <level label="ii"> <text>The credit union has sufficient net worth to support the investment or loan; and</text> </level> <level label="iii"> <text>The credit union generally is operating in compliance with the provisions of this title.</text> </level> </level> <level label="5"> <text>Unless the Commissioner notifies the credit union that a different time period is necessary, within 60 days of receipt of the notice specified in paragraph (2) of this subsection, the Commissioner shall notify the credit union of the determination on the approval of the investment or loan.</text> </level> </level> <level label="c"> <text>As deemed necessary by the Commissioner, the Commissioner shall have complete:</text> <level label="1"> <text>Access to the books and records of a credit union service organization; and</text> </level> <level label="2"> <text>Authority to review the internal controls of a credit union service organization.</text> </level> </level> <level label="d"> <text>A credit union service organization may serve on a contractual basis more than one credit union and its members.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-707" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <level label="a"> <level label="1"> <text>In addition to any other investment authorized under this subtitle, a credit union may purchase, construct, or acquire and hold, either individually or jointly with another credit union, fixed assets for the purpose of providing adequate facilities for the transaction of present and future business.</text> </level> <level label="2"> <text>A credit union may use fixed assets acquired under this section for:</text> <level label="i"> <text>The principal office functions;</text> </level> <level label="ii"> <text>Branches; and</text> </level> <level label="iii"> <text>Any other activities in which the credit union engages.</text> </level> </level> <level label="3"> <text>A credit union may rent excess space in a fixed asset acquired under this section as a source of income.</text> </level> <level label="4"> <text>A credit union’s investment in fixed assets acquired under this section:</text> <level label="i"> <text>May exceed 4% of the total assets of the credit union only with the prior approval of the Commissioner; and</text> </level> <level label="ii"> <text>May not exceed 6% of the total assets of the credit union.</text> </level> </level> </level> <level label="b"> <text>A credit union may purchase, lease, or acquire and hold tangible personal property, either individually or jointly with another credit union, as may be necessary or incidental to the operations of the credit union.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-708" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <level label="a"> <level label="1"> <text>Subject to the provisions of paragraph (2) of this subsection, a credit union may borrow money for the purchase of fixed assets.</text> </level> <level label="2"> <text>The term of the loan may not exceed:</text> <level label="i"> <text>15 years for borrowings secured by real or leasehold property; and</text> </level> <level label="ii"> <text>5 years for borrowings secured by other fixed assets.</text> </level> </level> </level> <level label="b"> <text>A credit union may borrow money for a purpose other than the purchase of fixed assets as long as the total borrowing does not exceed the greater of:</text> <level label="1"> <text>Two times the net worth of the borrowing credit union; or</text> </level> <level label="2"> <text>10% of the total assets of the borrowing credit union.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-709" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <text>A credit union may change its place of business on written notice to the Commissioner.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-710" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <text>The fiscal year of each credit union ends at the close of business on December 31.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-711" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <level label="a"> <text>A credit union shall post its hours of operation prominently in its office.</text> </level> <level label="b"> <text>Each credit union shall be open for business during its posted hours, except that a credit union may close:</text> <level label="1"> <text>On any State holiday; and</text> </level> <level label="2"> <text>At any other time if:</text> <level label="i"> <text>Notice of the closing is posted prominently in its office 3 business days in advance;</text> </level> <level label="ii"> <text>Specifically authorized to close by the Commissioner; or</text> </level> <level label="iii"> <text>An emergency exists that affects the credit union and it is not practical to obtain authorization from the Commissioner before closing the affected credit union.</text> </level> </level> </level> <level label="c"> <text>If a credit union closes under the provisions of subsection (b)(2)(iii) of this section, the chairman of the board or the president of the affected credit union shall notify the Commissioner of the reason for the closing of the credit union as soon as possible but no later than 24 hours after the closing of the credit union.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-712" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Branch” means a deposit–taking office of a credit union in the State that is open to the public as of December 31 of the calendar year preceding the request for an assessment offset credit.</text> </level> <level label="3"> <text>“De novo branch” means a deposit–taking office of a credit union in the State that was opened to the public for the first time during the calendar year immediately preceding a request for an assessment offset credit that:</text> <level label="i"> <text>Was originally established by the credit union as a branch; but</text> </level> <level label="ii"> <text>Did not become a branch of the credit union as a result of:</text> <level label="1"> <text>The acquisition by the credit union of an insured depository institution or a branch of an insured depository institution; or</text> </level> <level label="2"> <text>The conversion, merger, or consolidation of an insured depository institution or a branch of an insured depository institution.</text> </level> </level> </level> <level label="4"> <text>“Deposits” means deposits originated and housed at a credit union branch located in a low– to moderate–income tract as reported by a credit union to the Commissioner each year as of December 31.</text> </level> <level label="5"> <text>“Low– to moderate–income tract” has the meaning stated in § 5–203 of this article.</text> </level> <level label="6"> <text>“Maryland Opportunity Account” means a transaction account offered by a credit union to its members that meets standards annually determined by the Commissioner that promote fair and equal access to financial services.</text> </level> </level> <level label="b"> <text>This section applies only to a credit union with assets of $300,000 or greater.</text> </level> <level label="c"> <level label="1"> <text>The Commissioner shall impose an annual assessment on each credit union as provided in this subsection to cover the expense of regulating credit unions.</text> </level> <level label="2"> <text>The Commissioner shall assess each credit union the sum of:</text> <level label="i"> <text>$1,000; and</text> </level> <level label="ii"> <text>8 cents for each $1,000 of the assets of the credit union over $1,000,000.</text> </level> </level> <level label="3"> <text>The assessment shall be based on assets stated in the credit union’s most recent financial report.</text> </level> <level label="4"> <text>A well–capitalized credit union with a composite CAMELS rating of 1 or 2 may file with the Commissioner a request for an assessment offset credit of:</text> <level label="i"> <text>12 cents for each $1,000 of deposits in a de novo branch located in a low– to moderate–income tract for the first 5 years after the date the de novo branch opened; or</text> </level> <level label="ii"> <text>6 cents for each $1,000 of deposits in a branch located in a low– to moderate–income tract not to exceed the cap set by the Commissioner by December 31 of the calendar year preceding the request for an assessment offset credit.</text> </level> </level> <level label="5"> <text>In addition to an assessment offset credit under paragraph (4) of this subsection, a well–capitalized credit union with a composite CAMELS rating of 1, 2, or 3 may file with the Commissioner a request for an assessment credit of:</text> <level label="i"> <text>$5,000 on receiving the Commissioner’s initial approval that the credit union offers at least one Maryland Opportunity Account; and</text> </level> <level label="ii"> <text>$3,000 for each year thereafter that the credit union offers at least one Maryland Opportunity Account that, as determined by the Commissioner, remains in active use by the credit union’s members.</text> </level> </level> </level> <level label="d"> <text>A credit union shall pay the assessment imposed under this section to the Commissioner on or before the April 15 after the assessment is imposed.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-713" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <text>If a credit union files an application with the Maryland Insurance Commissioner to purchase or make available, as an agent or otherwise, insurance for its members either on an individual or group basis, the credit union shall notify the Commissioner, within 10 days after filing the application, that the credit union has filed the application.</text> </section> <section article="gfi" article_name="Financial Institutions" number="6-714" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <level label="a"> <text>As approved by the Commissioner, a credit union may enter into marketing arrangements with a person to facilitate the credit union’s members’ voluntary purchase of goods or other services from third parties, consistent with the purposes of the credit union.</text> </level> <level label="b"> <text>A credit union may be compensated for the services provided under subsection (a) of this section.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-715" title_number="6" title_name="Credit Unions" subtitle_number="7" subtitle_name="Miscellaneous Regulations"> <level label="a"> <text>A credit union shall keep the books and records that the Commissioner requires to determine compliance with this title.</text> </level> <level label="b"> <text>Unless a longer period is expressly required by State or federal law, a credit union shall retain the books and records required under subsection (a) of this section for a period of at least 5 years.</text> </level> <level label="c"> <text>A credit union may retain the books and records required under subsection (a) of this section at any location, provided that the credit union:</text> <level label="1"> <text>Notifies the Commissioner in writing of the location of the books and records; and</text> </level> <level label="2"> <text>Makes the books and records available at the credit union’s principal place of business, as agreed by the Commissioner and the credit union, within 7 days of a written request for examination by the Commissioner.</text> </level> </level> <level label="d"> <text>A credit union shall retain the books and records required under subsection (a) of this section in one of the following ways:</text> <level label="1"> <text>Original form;</text> </level> <level label="2"> <text>An electronic equivalent approved by the Commissioner; or</text> </level> <level label="3"> <text>A microphotographic copy approved by the Commissioner.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-801" title_number="6" title_name="Credit Unions" subtitle_number="8" subtitle_name="Extraordinary Actions"> <level label="a"> <text>Any State credit union may convert into a federal credit union as provided by federal law and as provided in this section.</text> </level> <level label="b"> <text>A majority of the board of a credit union proposing to convert shall:</text> <level label="1"> <text>Adopt a resolution that declares that the conversion is advisable;</text> </level> <level label="2"> <text>Set a date for a vote on the proposed conversion by the members of the credit union at an annual or special meeting of the members or by mail ballot to be filed on or before that date;</text> </level> <level label="3"> <text>Comply with federal law regarding conversion; and</text> </level> <level label="4"> <text>File the required conversion application with the Commissioner.</text> </level> </level> <level label="c"> <text>The Commissioner, at the request of the board, may:</text> <level label="1"> <text>Waive the vote of the members; and</text> </level> <level label="2"> <text>Substitute any reasonable method of determining the approval by the members.</text> </level> </level> <level label="d"> <text>Unless the Commissioner takes action under subsection (c) of this section, written notice of the proposed conversion and of the date set for the vote shall be delivered in person to each member or mailed to each member at the member’s address as recorded by the credit union, not more than 30 days nor less than 7 days before the date set for the vote.</text> </level> <level label="e"> <level label="1"> <text>Unless the Commissioner takes action under subsection (c) of this section, the proposed conversion shall be approved by the affirmative vote of a majority of the members who vote on the proposal.</text> </level> <level label="2"> <text>Within 10 days after the vote, a statement of the results of the vote shall be filed with the Commissioner. The statement shall be verified by the chairman or vice chairman of the board and by the secretary of the credit union.</text> </level> </level> <level label="f"> <level label="1"> <text>Within 90 days after a proposed conversion is approved by the members, the credit union shall take any action necessary under federal law to make it a federal credit union.</text> </level> <level label="2"> <text>Within 10 days after the credit union receives a federal credit union charter, a copy of that charter shall be filed with the Commissioner and, when the copy is filed, the credit union ceases to be a State credit union.</text> </level> </level> <level label="g"> <text>When the conversion from a State credit union to a federal credit union is complete:</text> <level label="1"> <text>The converted credit union is no longer subject to the provisions of this title; and</text> </level> <level label="2"> <text>The successor federal credit union owns all the assets and is responsible for all the obligations of the former State credit union as though the conversion had not taken place.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-802" title_number="6" title_name="Credit Unions" subtitle_number="8" subtitle_name="Extraordinary Actions"> <level label="a"> <text>Any credit union organized under the laws of any other state or of the United States may convert to a State credit union as provided in this section.</text> </level> <level label="b"> <text>A credit union proposing to convert shall meet:</text> <level label="1"> <text>All of the requirements of this title for the incorporation of a credit union in this State; and</text> </level> <level label="2"> <text>All of the requirements of the Commissioner, including any specific conditions that a credit union must meet in order to convert.</text> </level> </level> <level label="c"> <text>A majority of the board of a credit union proposing to convert shall:</text> <level label="1"> <text>Adopt a resolution that declares that the conversion is advisable; and</text> </level> <level label="2"> <text>Set a date for a vote on the proposed conversion by the members at an annual or special meeting of the members or by mail ballot to be filed on or before that date.</text> </level> </level> <level label="d"> <text>The Commissioner, at the request of the board, may:</text> <level label="1"> <text>Waive the vote of the members; and</text> </level> <level label="2"> <text>Substitute any reasonable method of determining the approval by the members.</text> </level> </level> <level label="e"> <text>Unless the Commissioner takes action under subsection (d) of this section, written notice of the proposed conversion and of the date set for the vote shall be delivered in person to each member or mailed to each member at the member’s address as recorded by the credit union, not more than 30 days nor less than 7 days before the date set for the vote.</text> </level> <level label="f"> <level label="1"> <text>Unless the Commissioner takes action under subsection (d) of this section, the proposed conversion shall be approved by the affirmative vote of a majority of the members who vote on the proposal.</text> </level> <level label="2"> <text>Within 10 days after the vote, a statement of the results of the vote shall be filed with the Commissioner. The statement shall be verified by the chairman or vice chairman of the board and the secretary of the credit union.</text> </level> </level> <level label="g"> <level label="1"> <text>A credit union may convert to a State credit union if:</text> <level label="i"> <text>The converted credit union:</text> <level label="1"> <text>Meets the common bond requirements of the proposed field of membership type; and</text> </level> <level label="2"> <text>Files with the Commissioner an application and any other documents that the Commissioner deems necessary to make a determination; and</text> </level> </level> <level label="ii"> <text>The Commissioner determines that the conversion:</text> <level label="1"> <text>Is in the best interest of the existing and proposed membership;</text> </level> <level label="2"> <text>Will likely result in better service to the existing membership;</text> </level> <level label="3"> <text>Is in accordance with sound credit union practices; and</text> </level> <level label="4"> <text>Does not expose the funds of the existing members to unnecessary risk.</text> </level> </level> </level> <level label="2"> <text>Unless the Commissioner notifies the credit union that a different time period is necessary, within 120 days after the application is filed, the Commissioner shall notify the credit union of the determination on the application.</text> </level> </level> <level label="h"> <text>When the conversion is complete, the successor credit union owns all of the assets and is responsible for all the obligations of the credit union as though the conversion had not taken place.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-803" title_number="6" title_name="Credit Unions" subtitle_number="8" subtitle_name="Extraordinary Actions"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Merging credit union” means a credit union that is absorbed or acquired by another credit union in a merger and ceases to exist after the merger.</text> </level> <level label="3"> <text>“New credit union” means a credit union that is created when two or more credit unions consolidate to form a newly created credit union.</text> </level> <level label="4"> <text>“Surviving credit union” means a credit union that absorbs or acquires another credit union in a merger and continues to exist after the merger.</text> </level> </level> <level label="b"> <level label="1"> <level label="i"> <text>With the approval of the Commissioner, any credit union may merge or consolidate as provided in this section.</text> </level> <level label="ii"> <text>A merger or consolidation under this section may be with a credit union organized under the laws of the United States, this State, or any other state.</text> </level> </level> <level label="2"> <level label="i"> <text>A single common bond credit union may merge or consolidate with another single common bond credit union resulting in a surviving or new single common bond credit union provided that the credit unions party to the merger or consolidation share the same single common bond, as defined under § 6–301(c)(2) of this title, prior and subsequent to the merger or consolidation.</text> </level> <level label="ii"> <text>A single common bond credit union may merge or consolidate with another single common bond credit union resulting in a surviving or new multiple common bond credit union provided that:</text> <level label="1"> <text>Prior to the merger or consolidation, one of the credit unions converts into a multiple common bond credit union, as provided under § 6–304 of this title, which includes in its field of membership the group served by the other single common bond credit union; and</text> </level> <level label="2"> <text>The surviving or new multiple common bond credit union satisfies the requirements for multiple common bonds under § 6–301(c)(3) and (e) of this title.</text> </level> </level> </level> <level label="3"> <text>A single common bond credit union may merge or consolidate with a multiple common bond credit union resulting in a surviving or new multiple common bond credit union provided that:</text> <level label="i"> <text>Prior to the merger or consolidation, the multiple common bond credit union includes or adds to its field of membership the group served by the single common bond credit union, as provided under § 6–303 of this title; and</text> </level> <level label="ii"> <text>The surviving or new multiple common bond credit union satisfies the requirements for multiple common bonds under § 6–301(c)(3) and (e) of this title.</text> </level> </level> <level label="4"> <text>A multiple common bond credit union may merge or consolidate with another multiple common bond credit union resulting in a surviving or new multiple common bond credit union provided that:</text> <level label="i"> <level label="1"> <text>Prior to a merger, the credit union that will become the surviving credit union includes or adds to its field of membership the groups served by the credit union that will become the merging credit union, as provided under § 6–303 of this title; or</text> </level> <level label="2"> <text>In the case of a consolidation, the field of membership of the new credit union includes all groups that will be served by that new credit union; and</text> </level> </level> <level label="ii"> <text>The surviving or new multiple common bond credit union satisfies the requirements for multiple common bonds under § 6–301(c)(3) and (e) of this title.</text> </level> </level> <level label="5"> <text>A single or multiple common bond credit union may merge, as the merging credit union, with a community credit union, as the surviving credit union, provided that:</text> <level label="i"> <level label="1"> <text>The merging credit union has a branch within the community boundaries of the surviving credit union; or</text> </level> <level label="2"> <text>A majority of the members in the field of membership of the merging credit union would qualify for membership in the surviving credit union;</text> </level> </level> <level label="ii"> <text>No less than 30 days before the effective date of the merger, the merging credit union gives notice of the merger to all groups of potential members of the merging credit union that will be removed from the field of membership as a result of the merger; and</text> </level> <level label="iii"> <text>On and after the effective date of the merger, the surviving credit union:</text> <level label="1"> <text>May not continue to serve groups within the field of membership of the merging credit union that are located outside the community boundaries of the surviving credit union; and</text> </level> <level label="2"> <text>May continue to serve members of a group identified under item 1 of this item who are members before the effective date of the merger.</text> </level> </level> </level> <level label="6"> <text>A community credit union may merge or consolidate with another community credit union provided that:</text> <level label="i"> <text>The members of the surviving or new credit union remain within a single well–defined local community, neighborhood, rural district, or county; and</text> </level> <level label="ii"> <text>The surviving or new credit union is within reasonable geographic proximity to the members of the credit union party to the merger or consolidation.</text> </level> </level> <level label="7"> <text>Except as provided in paragraphs (8) and (9) of this subsection, a community credit union may not merge, as a merging credit union, with a single or multiple common bond credit union.</text> </level> <level label="8"> <text>Notwithstanding the provisions of paragraph (2), (3), (4), or (5) of this subsection or the numerical limitations prescribed in § 6–301(e) of this title, the Commissioner may approve the merger or consolidation of any credit union with a multiple common bond credit union, as a new or surviving credit union, when safety and soundness concerns are present as determined by the Commissioner.</text> </level> <level label="9"> <text>Notwithstanding the provisions of paragraphs (2) through (8) of this subsection, the Commissioner may approve the merger or consolidation of any credit union, whether or not the credit unions party to the merger or consolidation have the same field of membership type, if:</text> <level label="i"> <text>Any of the credit unions party to the merger or consolidation is insolvent or likely to become insolvent;</text> </level> <level label="ii"> <text>The merger or consolidation is in the best interest of the membership of the credit unions party to the merger or consolidation; and</text> </level> <level label="iii"> <text>The merger or consolidation will not adversely affect the financial condition of the surviving or new credit union.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>If the surviving or new credit union will be a State credit union:</text> <level label="i"> <text>The merger or consolidation shall be made in accordance with the provisions of this subtitle; and</text> </level> <level label="ii"> <text>If one of the credit unions is a federal credit union, federal law governs its actions and the rights of its members.</text> </level> </level> <level label="2"> <text>If the surviving or new credit union will be a federal credit union:</text> <level label="i"> <text>The merger or consolidation shall be made in accordance with federal law which governs its actions and the rights of its members; and</text> </level> <level label="ii"> <text>The merger or consolidation shall be made in accordance with the provisions of this subtitle for a State credit union and the rights of its members.</text> </level> </level> <level label="3"> <text>If the surviving or new credit union will be another State credit union:</text> <level label="i"> <text>The merger or consolidation shall be made in accordance with the provisions of this subtitle for the State credit union and the rights of its members; and</text> </level> <level label="ii"> <text>The merger or consolidation shall be made in accordance with the provisions of the other State laws for the other State credit union and the rights of its members.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>A majority of the board of each credit union proposing a consolidation shall:</text> <level label="i"> <text>Adopt a resolution that declares that the consolidation is advisable; and</text> </level> <level label="ii"> <text>Set a date for a vote on the proposed consolidation by the members of each credit union party to the consolidation at any annual or special meeting of the membership or by mail ballot to be filed on or before that date.</text> </level> </level> <level label="2"> <level label="i"> <text>A majority of the board of each credit union proposing a merger shall adopt a resolution that declares that the merger is advisable.</text> </level> <level label="ii"> <text>A majority of the board of each merging credit union proposing the merger shall set a date for a vote on the proposed merger by the members of each merging credit union at any annual or special meeting of the membership or by mail ballot to be filed on or before that date.</text> </level> <level label="iii"> <text>A majority of the board of the surviving credit union proposing the merger may set a date for a vote on the proposed merger by the members of the surviving credit union at any annual or special meeting of the membership or by mail ballot to be filed on or before that date.</text> </level> </level> </level> <level label="e"> <text>The Commissioner, at the request of a board, may:</text> <level label="1"> <text>Waive the vote of the members; and</text> </level> <level label="2"> <text>Substitute any reasonable method of determining the approval by the members.</text> </level> </level> <level label="f"> <level label="1"> <text>A consolidation shall be in accordance with a plan that:</text> <level label="i"> <text>States the field of membership type that the new credit union will have;</text> </level> <level label="ii"> <text>Is agreed to by a majority of the board of each credit union party to the consolidation; and</text> </level> <level label="iii"> <text>Unless provided otherwise by the Commissioner, is approved by the members of each credit union party to the consolidation by the affirmative vote of a majority of the members of each credit union party to the consolidation who vote on the proposal.</text> </level> </level> <level label="2"> <text>A merger shall be in accordance with a plan that:</text> <level label="i"> <text>States the field of membership type that the surviving credit union will have;</text> </level> <level label="ii"> <text>Is agreed to by a majority of the board of each credit union party to the merger; and</text> </level> <level label="iii"> <text>Unless provided otherwise by the Commissioner, is approved by the members of each merging credit union party to the merger by the affirmative vote of a majority of the members of each merging credit union party to the merger who vote on the proposal.</text> </level> </level> </level> <level label="g"> <level label="1"> <text>Unless consistent with this section the approval by the members is both not required and not obtained, after agreement by the board and approval by the members of each credit union party to the merger or consolidation, two officers of each credit union party to the merger or consolidation shall execute a certificate of merger or consolidation.</text> </level> <level label="2"> <text>The certificate of merger or consolidation shall include as to each credit union party to the merger or consolidation:</text> <level label="i"> <text>The time and place of the meeting of the board at which the plan was agreed to;</text> </level> <level label="ii"> <text>The vote by which the plan was agreed to by the board;</text> </level> <level label="iii"> <text>A copy of the resolution or other action by which the plan was agreed to by the board; and</text> </level> <level label="iv"> <text>Unless consistent with this section the approval by the members is both not required and not obtained:</text> <level label="1"> <text>The date on or by which the plan was approved by the members of each credit union; and</text> </level> <level label="2"> <text>Unless provided otherwise by the Commissioner, the vote by which the plan was approved by the members of each credit union.</text> </level> </level> </level> </level> <level label="h"> <level label="1"> <text>A credit union may merge or consolidate if:</text> <level label="i"> <level label="1"> <text>The surviving or new credit union meets the common bond requirements of the proposed field of membership type; and</text> </level> <level label="2"> <text>Each credit union party to the merger or consolidation files with the Commissioner:</text> </level> <level label="A"> <text>The certificate of merger or consolidation;</text> </level> <level label="B"> <text>A copy of the plan of merger or consolidation; and</text> </level> <level label="C"> <text>Any other documents that the Commissioner deems necessary to make a determination on the application; and</text> </level> </level> <level label="ii"> <text>The Commissioner determines that:</text> <level label="1"> <text>Each credit union party to the merger or consolidation has not engaged in any material unsafe or unsound practice during the 1–year period preceding the date of filing of the certificate of merger or consolidation;</text> </level> <level label="2"> <text>The surviving or new credit union has adequate net worth;</text> </level> <level label="3"> <text>The surviving or new credit union has the administrative capability to serve the members of the surviving or new credit union and the financial resources to meet the need for additional staff and assets to serve the surviving or new credit union; and</text> </level> <level label="4"> <text>Any potential harm that the surviving or new credit union may have on any other credit union and its membership is clearly outweighed, in the public interest, by the probable beneficial effect of the merger or consolidation in meeting the convenience and needs of the members of the surviving or new credit union.</text> </level> </level> </level> <level label="2"> <text>Unless the Commissioner notifies the credit union that a different time period is necessary, within 60 days after the certificate of merger or consolidation is filed, the Commissioner shall:</text> <level label="i"> <text>Notify each credit union party to the merger or consolidation of the determination on the application; and</text> </level> <level label="ii"> <text>Certify the certificate of merger or consolidation and return the certificate to each credit union party to the merger or consolidation.</text> </level> </level> </level> <level label="i"> <text>When the certificate is certified and sent back to the credit unions by the Commissioner:</text> <level label="1"> <text>All of the property, property rights, and members’ interest of the credit unions party to the merger or consolidation belong to the surviving or new credit union without deed, endorsement, or other instrument of transfer;</text> </level> <level label="2"> <text>All of the debts, obligations, and liabilities of the credit unions party to the merger or consolidation are assumed by the surviving or new credit union; and</text> </level> <level label="3"> <text>The rights and privileges of the members of the credit unions party to the merger or consolidation remain intact.</text> </level> </level> <level label="j"> <level label="1"> <text>The surviving or new credit union shall act promptly to file and record the certified certificate and plan of merger or consolidation with the State Department of Assessments and Taxation.</text> </level> <level label="2"> <text>When the certificate and plan of merger or consolidation are filed with the State Department of Assessments and Taxation, the merger or consolidation takes effect.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-804" title_number="6" title_name="Credit Unions" subtitle_number="8" subtitle_name="Extraordinary Actions"> <level label="a"> <text>Any credit union may dissolve voluntarily, if the board, the members of the credit union, and the Commissioner approve the dissolution as provided in this section.</text> </level> <level label="b"> <text>A majority of the board of a credit union proposing to dissolve shall adopt a resolution that:</text> <level label="1"> <text>Recommends that the credit union be dissolved voluntarily; and</text> </level> <level label="2"> <text>Directs that a proposal of dissolution be submitted to the members.</text> </level> </level> <level label="c"> <level label="1"> <text>A proposed dissolution shall be approved at an annual or special meeting of the members or by mail ballot by the affirmative vote of two-thirds of the entire membership of the credit union.</text> </level> <level label="2"> <text>The Commissioner may substitute any reasonable method of determining the vote of the members.</text> </level> </level> <level label="d"> <text>After a proposed dissolution is approved by the members, the credit union shall file with the Commissioner:</text> <level label="1"> <text>A copy of the resolution of the board recommending voluntary dissolution, attested to by:</text> <level label="i"> <text>The chairman or vice chairman of the board; and</text> </level> <level label="ii"> <text>The secretary or treasurer of the credit union;</text> </level> </level> <level label="2"> <text>A verified statement of the names and addresses of the officers and directors of the credit union; and</text> </level> <level label="3"> <text>The vote by which the voluntary dissolution was approved by the members.</text> </level> </level> <level label="e"> <level label="1"> <text>If the Commissioner finds that the credit union is solvent, the Commissioner shall issue to the credit union duplicate certificates stating that the credit union appears to have complied with this section.</text> </level> <level label="2"> <text>The credit union shall file one of the certificates with the State Department of Assessments and Taxation.</text> </level> </level> <level label="f"> <text>When the certificate is filed with the State Department of Assessments and Taxation, the credit union is dissolved.</text> </level> <level label="g"> <level label="1"> <text>On dissolution, a credit union may operate only to wind up its business and affairs.</text> </level> <level label="2"> <text>Under the direction of the Commissioner, the liquidating agent of the dissolved credit union, appointed by the board, shall:</text> <level label="i"> <text>Discharge its debts and obligations;</text> </level> <level label="ii"> <text>Collect and distribute its assets; and</text> </level> <level label="iii"> <text>Do anything else necessary to wind up its business and affairs.</text> </level> </level> <level label="3"> <text>For 3 years after the dissolution becomes effective, the credit union, acting by its board and liquidating agent:</text> <level label="i"> <text>Shall continue in existence for the purpose of winding up its business and affairs; and</text> </level> <level label="ii"> <text>May sue and be sued in its name.</text> </level> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-805" title_number="6" title_name="Credit Unions" subtitle_number="8" subtitle_name="Extraordinary Actions"> <level label="a"> <text>Any credit union voluntarily may place its business and assets in the hands of the Commissioner for liquidation as provided in this section.</text> </level> <level label="b"> <text>A majority of the board proposing a voluntary receivership shall:</text> <level label="1"> <text>Adopt a resolution that declares that the voluntary receivership is advisable; and</text> </level> <level label="2"> <text>Set a date for a vote on the proposed voluntary receivership by the members of the credit union at an annual or special meeting of the members or by mail ballot to be filed on or before that date.</text> </level> </level> <level label="c"> <text>The Commissioner, at the request of the board, may:</text> <level label="1"> <text>Waive the vote of the members; and</text> </level> <level label="2"> <text>Substitute any reasonable method of determining the approval by the members.</text> </level> </level> <level label="d"> <text>Unless the Commissioner takes action under subsection (c) of this section, the proposed voluntary receivership shall be approved by the affirmative vote of a majority of the members of the credit union who vote on the proposal.</text> </level> <level label="e"> <text>After the action is approved by the members, the proper officers of the credit union shall certify the action of the members to the Commissioner, and the Commissioner shall post a notice at each office of the credit union that states: “This credit union is in the hands of the Maryland Commissioner of Financial Regulation for liquidation.”</text> </level> <level label="f"> <text>If a credit union is placed in the hands of the Commissioner under this section, the Commissioner shall place the credit union in receivership for liquidation in the same manner as provided for a banking institution under Title 5, Subtitle 6 of this article.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-806" title_number="6" title_name="Credit Unions" subtitle_number="8" subtitle_name="Extraordinary Actions"> <text>With the approval of the Commissioner, a credit union may purchase the assets or assume the liabilities of another credit union whether or not the credit unions have the same field of membership type, if:</text> <level label="1"> <text>The other credit union is insolvent or likely to become insolvent;</text> </level> <level label="2"> <text>The purchase or assumption is in the best interest of the membership of the other credit union; and</text> </level> <level label="3"> <text>The purchase or assumption will not adversely affect the financial condition of the credit union that makes the purchase or assumption.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-807" title_number="6" title_name="Credit Unions" subtitle_number="8" subtitle_name="Extraordinary Actions"> <level label="a"> <text>A credit union may establish a branch in the State in accordance with the provisions of this section.</text> </level> <level label="b"> <level label="1"> <text>A credit union that proposes to establish a branch in the State shall:</text> <level label="i"> <text>File with the Commissioner, at least 30 days before the intended opening date, a notice of intention to open a branch;</text> </level> <level label="ii"> <text>Submit to the Commissioner any information the Commissioner requires in order to evaluate the proposed branch; and</text> </level> <level label="iii"> <text>Pay to the Commissioner a branch fee of $100.</text> </level> </level> <level label="2"> <text>The branch fee may not apply to a branch that is acquired by a credit union through a merger or consolidation with, or transfer to the credit union of all or substantially all of the assets of, a credit union.</text> </level> </level> <level label="c"> <text>In deciding whether to approve the establishment of a branch, the Commissioner shall consider whether:</text> <level label="1"> <text>The establishment of the branch will promote the convenience of the members of the credit union;</text> </level> <level label="2"> <text>The applicant has sufficient net worth to support the branch; and</text> </level> <level label="3"> <text>The applicant generally is operating in compliance with the provisions of this title.</text> </level> </level> <level label="d"> <level label="1"> <text>The Commissioner shall decide whether to approve the establishment of a branch within 30 days of receipt of the notice specified in subsection (b)(1) of this section.</text> </level> <level label="2"> <text>The establishment of a branch shall be deemed approved if the Commissioner takes no action on the notice within the time limit specified in this subsection.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-808" title_number="6" title_name="Credit Unions" subtitle_number="8" subtitle_name="Extraordinary Actions"> <level label="a"> <text>An out-of-state credit union shall provide the Commissioner, within 15 days of opening a branch in the State, with a notice of the opening of the branch.</text> </level> <level label="b"> <text>A credit union chartered and primarily regulated by another state that proposes to establish a branch in this State shall qualify under § 7-203 of the Corporations and Associations Article to do business in the State as a foreign corporation.</text> </level> <level label="c"> <text>An out-of-state credit union that has a branch in this State may establish additional branches in this State:</text> <level label="1"> <text>To the same extent as a credit union; or</text> </level> <level label="2"> <text>To the extent otherwise permitted by federal law.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-809" title_number="6" title_name="Credit Unions" subtitle_number="8" subtitle_name="Extraordinary Actions"> <level label="a"> <text>A credit union may require not more than 60 days’ notice of a member’s intention to withdraw from a share account or deposit account.</text> </level> <level label="b"> <text>A requirement imposed under subsection (a) of this section shall:</text> <level label="1"> <text>Apply to all members of the credit union; and</text> </level> <level label="2"> <text>Be included in each member’s account agreement.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-901" title_number="6" title_name="Credit Unions" subtitle_number="9" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <level label="1"> <text>Except for a credit union or an out–of–state credit union authorized to do business in this State, a person may not:</text> <level label="i"> <text>Use or advertise any name or title that contains the words “credit union” or any derivation of that term;</text> </level> <level label="ii"> <text>Represent itself as a credit union;</text> </level> <level label="iii"> <text>Conduct business as a credit union; or</text> </level> <level label="iv"> <text>Conduct business under a name or title that:</text> <level label="1"> <text>Indicates or reasonably implies that the person engages in or transacts the type of business conducted by a credit union; or</text> </level> <level label="2"> <text>Is calculated to lead a person to believe that the business engaged in or transacted is the type of business conducted by a credit union.</text> </level> </level> </level> <level label="2"> <text>Any person who violates any provision of this subsection is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $3,000 or imprisonment not exceeding 5 years or both per occurrence.</text> </level> </level> <level label="b"> <text>This section does not apply to an association or league of credit unions, whether or not the association or league is incorporated.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-902" title_number="6" title_name="Credit Unions" subtitle_number="9" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>A person may not willfully make, circulate, or send to another person any untrue statement that is derogatory to the financial condition or that affects the solvency or financial standing of any credit union doing business in the State, or counsel, aid, procure, or induce another to make, circulate, or send to another person such a statement.</text> </level> <level label="b"> <text>A person that violates any provision of this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $1,000 or imprisonment not exceeding 3 years or both.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-903" title_number="6" title_name="Credit Unions" subtitle_number="9" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>An officer, official, or employee of a credit union may not willfully and knowingly make or cause to be made a false statement or false entry in the records of the credit union or, with the intent to deceive a person authorized to examine the affairs of the credit union, sign or exhibit false records.</text> </level> <level label="b"> <text>An officer, official, or employee who violates any provision of this section is guilty of a felony and on conviction is subject to a fine not exceeding $5,000 or imprisonment not exceeding 10 years or both.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-904" title_number="6" title_name="Credit Unions" subtitle_number="9" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>An officer or official who in any way knowingly permits or participates in making a loan in violation of § 6-611 of this title is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $3,000 or imprisonment not exceeding 5 years or both, per occurrence.</text> </level> <level label="b"> <text>If a loan is made in violation of § 6-611 of this title, the credit union may recover the amount of the loan from:</text> <level label="1"> <text>Any borrower; or</text> </level> <level label="2"> <text>Any officer or official who knowingly permitted or participated in making the loan.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-905" title_number="6" title_name="Credit Unions" subtitle_number="9" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>The Commissioner may order a credit union, or enter into an agreement with a credit union, to take corrective action if the Commissioner finds that the credit union:</text> <level label="1"> <text>Has failed to file a report when due;</text> </level> <level label="2"> <text>Is insolvent;</text> </level> <level label="3"> <text>Has violated any provision of this title; or</text> </level> <level label="4"> <text>Is engaged in an unsafe or unauthorized practice.</text> </level> </level> <level label="b"> <level label="1"> <text>Before the order becomes effective, the Commissioner shall give the credit union an opportunity for a hearing.</text> </level> <level label="2"> <text>Notice of the hearing shall be given and the hearing shall be held in accordance with Title 10 of the State Government Article.</text> </level> </level> <level label="c"> <text>If the Commissioner determines that the violation or practice under subsection (a) of this section requires immediate action to protect depositors or members, the Commissioner:</text> <level label="1"> <text>May issue a cease and desist order that is effective on service; and</text> </level> <level label="2"> <text>Shall give the credit union an opportunity for a hearing to rescind the order.</text> </level> </level> <level label="d"> <text>If the credit union fails to comply with the order within 60 days after it becomes effective, the Commissioner may:</text> <level label="1"> <text>Take possession of the business and assets of the credit union and operate it until the Commissioner permits it to resume business or until the Commissioner orders its liquidation under item (3) of this subsection;</text> </level> <level label="2"> <text>Order the credit union share guaranty corporation that insures the credit union to take possession of the business and assets of the credit union and operate it in accordance with the Commissioner’s instructions until the Commissioner permits it to resume business or until the Commissioner orders its liquidation under item (3) of this subsection; or</text> </level> <level label="3"> <text>Place the credit union in receivership for liquidation in the same manner as provided for a banking institution under Title 5, Subtitle 6 of this article.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-906" title_number="6" title_name="Credit Unions" subtitle_number="9" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>The Commissioner shall order any credit union to cease and desist from:</text> <level label="1"> <text>An unsafe or unsound practice;</text> </level> <level label="2"> <text>A practice that is injurious to the public interest; or</text> </level> <level label="3"> <text>A violation of laws or rules or regulations that relate to the Commissioner’s supervision of the credit union.</text> </level> </level> <level label="b"> <text>To protect depositors or members, the Commissioner may include in a cease and desist order a restriction on the withdrawal of money from any credit union.</text> </level> <level label="c"> <text>The Commissioner may include in a cease and desist order a requirement that the officers or officials act affirmatively to correct any violation or practice.</text> </level> <level label="d"> <level label="1"> <text>Before a cease and desist order takes effect, the Commissioner shall give the credit union an opportunity for a hearing.</text> </level> <level label="2"> <text>Notice of the hearing shall be given and the hearing shall be held in accordance with Title 10 of the State Government Article.</text> </level> </level> <level label="e"> <text>If the Commissioner determines that the violation or practice under subsection (a) of this section requires immediate action to protect depositors or members, the Commissioner:</text> <level label="1"> <text>May issue a cease and desist order that is effective on service; and</text> </level> <level label="2"> <text>Shall give the credit union an opportunity for a hearing to rescind the order.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-906.1" title_number="6" title_name="Credit Unions" subtitle_number="9" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>After notice and a hearing, the Commissioner may assess a civil penalty against a credit union that the Commissioner determines has:</text> <level label="1"> <text>Violated a cease and desist order issued by the Commissioner under § 6–906 of this subtitle; or</text> </level> <level label="2"> <text>Engaged in:</text> <level label="i"> <text>An unsafe or unsound practice; or</text> </level> <level label="ii"> <text>A practice that is injurious to the public interest.</text> </level> </level> </level> <level label="b"> <text>The civil penalty may not exceed:</text> <level label="1"> <text>$1,000 per violation; and</text> </level> <level label="2"> <text>$1,000 per violation for each day that the violation continues.</text> </level> </level> <level label="c"> <level label="1"> <text>A civil penalty shall be assessed by written notice of assessment served on the person to be assessed.</text> </level> <level label="2"> <text>The notice of assessment shall state the:</text> <level label="i"> <text>Amount of the civil penalty;</text> </level> <level label="ii"> <text>Legal authority for the assessment; and</text> </level> <level label="iii"> <text>Matters of fact or law constituting the grounds for the assessment.</text> </level> </level> <level label="3"> <text>The notice of assessment shall constitute a final order for purposes of judicial review pursuant to § 10–221 of the State Government Article.</text> </level> </level> <level label="d"> <text>In determining the amount of the civil penalty to be assessed, the Commissioner shall consider:</text> <level label="1"> <text>The seriousness of the violation;</text> </level> <level label="2"> <text>The good faith of the violator;</text> </level> <level label="3"> <text>The violator’s history of previous violations;</text> </level> <level label="4"> <text>The deleterious effect of the violation on the public and the credit union industry;</text> </level> <level label="5"> <text>The assets of the violator; and</text> </level> <level label="6"> <text>Any other factors relevant to the determination of the civil penalty.</text> </level> </level> <level label="e"> <level label="1"> <text>A civil penalty assessed under this section shall be due and payable within 30 days after the Commissioner issues the notice of assessment.</text> </level> <level label="2"> <text>The Commissioner may reduce or set aside a civil penalty.</text> </level> </level> <level label="f"> <text>The Commissioner shall pay all civil penalties collected under this section into the General Fund of the State.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-906.2" title_number="6" title_name="Credit Unions" subtitle_number="9" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>In this section, “extraordinary circumstances” means a situation presenting specific concerns about the prompt withdrawal of money from, or the safety and soundness of, a credit union.</text> </level> <level label="b"> <text>In extraordinary circumstances and with the consent of the credit union, the Commissioner may close to the public a hearing concerning the assessment of a civil penalty, an order to cease and desist, or any other formal enforcement action by the Commissioner.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-907" title_number="6" title_name="Credit Unions" subtitle_number="9" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <level label="1"> <text>If the Commissioner believes that an officer or official has engaged in an unsafe or unsound practice, the Commissioner shall send a warning to the officer or official.</text> </level> <level label="2"> <text>If the Commissioner finds that the officer or official has continued to engage in the unsafe or unsound practice, the Commissioner may report the facts to the Secretary of Labor and the Attorney General.</text> </level> <level label="3"> <text>A copy of the report shall be sent by certified mail, return receipt requested, bearing a postmark from the United States Postal Service, to each director of the credit union.</text> </level> </level> <level label="b"> <level label="1"> <text>If the Commissioner finds that the unsafe or unsound practice continues after the warning and the officer, official, agent, or employee was provided an opportunity to be heard, the Commissioner may remove the officer, official, agent, or employee with the approval of the Secretary of Labor.</text> </level> <level label="2"> <text>Notice of the hearing shall be given and the hearing shall be held in accordance with Title 10 of the State Government Article.</text> </level> </level> <level label="c"> <text>A copy of the removal order shall be served on the individual removed and the credit union.</text> </level> <level label="d"> <text>If the Commissioner determines that the unsafe or unsound practice under subsection (a) of this section requires immediate action to protect depositors or members, the Commissioner:</text> <level label="1"> <text>May issue a cease and desist order that is effective on service; and</text> </level> <level label="2"> <text>Shall give the officer or official an opportunity for a hearing to rescind the order.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="6-908" title_number="6" title_name="Credit Unions" subtitle_number="9" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>If the Commissioner believes that any officer, official, agent, or employee of a credit union has violated any provision of this title, the Commissioner may report the violation directly to the Secretary of Labor and to the Attorney General who shall take the appropriate steps to institute a prosecution for the violation.</text> </level> <level label="b"> <level label="1"> <text>The Commissioner shall send a written warning to an officer, official, agent, or employee of a credit union who the Commissioner believes has violated any provision of this title.</text> </level> <level label="2"> <text>If after a warning the violation continues, the officer, official, agent, or employee may be removed as provided in § 6–907(b) of this subtitle.</text> </level> <level label="3"> <text>Unless otherwise specified, any officer, official, agent, or employee of a credit union who violates the provisions of this title is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $3,000 or imprisonment not exceeding 5 years.</text> </level> </level> <level label="c"> <text>If the Commissioner determines that the violation under subsection (a) of this section requires immediate action to protect depositors or members, the Commissioner:</text> <level label="1"> <text>May issue a cease and desist order that is effective on service; and</text> </level> <level label="2"> <text>Shall give the officer, official, agent, or employee an opportunity for a hearing to rescind the order.</text> </level> </level> </section>