# Financial Institutions (GFI)

## Title 7. Credit Union Share Insurance

### Subtitle 1. Credit Union Insurance Corporation

#### Section 7-101

(a) In this subtitle the following words have the meanings indicated.

(b) "Corporation" means the Credit Union Insurance Corporation.

(c) "Credit union" means:

  (1) Any credit union that is incorporated under the laws of this State; and

  (2) Any other credit union that is authorized to do business in this State and has its principal office in this State.

#### Section 7-102

(a) There is a Credit Union Insurance Corporation, established as a nonprofit, nonstock corporation, the members of which are credit unions that are accepted for membership under this part.

(b)

  (1) The Corporation is not and may not be deemed a department, unit, agency, or instrumentality of the State for any purpose.

  (2) All debts, claims, obligations, and liabilities of the Corporation, whenever incurred, shall be the debts, claims, obligations, and liabilities of the Corporation only and not of the State, its agencies, instrumentalities, officers, or employees.

  (3) The Corporation money may not be considered part of the General Fund of the State.

  (4) The debts, claims, obligations, and liabilities of the Corporation may not be considered to be a debt of the State or a pledge of its credit.

#### Section 7-103

The purposes of the Corporation are to:

(1) Insure and guarantee the share and deposit accounts of member credit unions;

(2) Improve and stimulate the ability of credit unions to provide low-cost consumer loans;

(3) Promote the elasticity and flexibility of the resources of credit unions;

(4) Make loans for liquidity purposes to credit unions;

(5) Discount notes of credit unions;

(6) Provide a State service of lending among credit unions;

(7) Help rehabilitate and stabilize credit unions;

(8) Help liquidate credit unions in an orderly manner when necessary;

(9) Help strengthen and develop credit unions serving low-income individuals; and

(10) Cooperate with and assist credit unions, organizations of credit unions, the Commissioner, the National Credit Union Administration, and others in improving the general welfare of the people through credit unions.

#### Section 7-104

(a) The Corporation exercises its powers and performs its duties subject to the authority of the Commissioner.

(b) Except as otherwise provided in this subtitle, the Corporation has all of the powers, privileges, and immunities granted to Maryland corporations under the Maryland General Corporation Law.

(c) Subject to the provisions of Part III of this subtitle, the Corporation has perpetual existence.

(d) The Corporation may:

  (1) Lend money to any credit union;

  (2) Guarantee, endorse, or act as surety on the obligations of or otherwise assist financially any credit union; and

  (3) Establish and regulate the terms and conditions of and charges for any loans or financial assistance to credit unions.

(e)

  (1) The Corporation may buy, lease, or otherwise acquire and sell, mortgage, lease, or otherwise dispose of real or personal property on the terms that its Board of Directors considers advisable.

  (2) The Corporation may acquire any real or personal property in satisfaction of debts or enforcement of obligations and may dispose of that property.

(f) The Corporation may:

  (1) Assist in the merger, stabilization, consolidation, or liquidation of credit unions; and

  (2) Take possession of and operate the business and assets of any credit union if ordered to do so by the Commissioner under Sec. 6-905 of this article.

(g) The Corporation may become a member of the National Association of Share Insurance Corporations or any comparable organization.

(h) The Corporation may invest any of its funds in:

  (1) Cash or deposits in checking or savings accounts with or certificates of deposit of:

    (i) Any bank that is a member of the Federal Deposit Insurance Corporation; and

    (ii) Any savings and loan association whose deposits are insured by the Federal Deposit Insurance Corporation;

  (2) Cash or deposits in share or deposit accounts with or certificates of deposit or notes of any credit union that is a member of the Corporation, the National Credit Union Administration Share Insurance Program, or a similar insurance program;

  (3) Obligations of:

    (i) The United States or any state or any political subdivision of any state;

    (ii) Any commission, instrumentality, agency, or authority of the United States or any state; and

    (iii) Any corporation that is incorporated under the laws of the United States or of any state;

  (4) Readily marketable, dividend-paying shares of any corporation that is incorporated under the laws of the United States or of any state, except that it may not invest more than 10 percent of its total assets in these shares nor more than 3 percent of its total assets in the shares of any one corporation; and

  (5) Any other investments, including common trust investments, that are permitted by law or authorized by the Commissioner for credit unions.

(i) The Corporation may:

  (1) Borrow money and otherwise incur obligations for any of its purposes;

  (2) Issue its secured or unsecured bonds, debentures, notes, or other evidences of obligation; and

  (3) Secure these obligations by mortgage, pledge, or other lien on all or any part of its property, rights, and privileges.

#### Section 7-105

(a) The Corporation shall insure and guarantee the share and deposit accounts of each member on the same basis, and to the same extent and amount as provided by the National Credit Union Administration Share Insurance Program.

(b) The Corporation may make contracts for reinsurance.

#### Section 7-106

(a)

  (1) Subject to the provisions of Part III of this subtitle, any credit union may apply to the Corporation to become a member of the Corporation.

  (2) The Corporation shall refer each application that it receives to the Commissioner.

(b)

  (1) On receipt of an application for membership, the Commissioner shall examine the affairs of the credit union.

  (2) If the Commissioner finds that the credit union qualifies for membership under Sec. 7-107 of this subtitle, the Commissioner shall certify that fact to the Corporation.

(c) The Corporation may not extend benefits to any credit union until the Corporation receives the certification of the Commissioner.

#### Section 7-107

(a)

  (1) A credit union becomes a member of the Corporation when:

    (i) The financial affairs, solvency, and management of a credit union have been certified by the Commissioner as approved for insurance of its share and deposit accounts; and

    (ii) The application of the credit union is accepted by the Board of Directors of the Corporation.

  (2) The Board of Directors of the Corporation may deny the application of a credit union only for good cause shown.

(b) Subject to the bylaws, rules, and regulations of the Corporation and except as provided in subsection (c) of this section and Part III of this subtitle, membership in the Corporation continues as long as the Corporation exists.

(c)

  (1) If the Board of Directors of the Corporation finds that unsafe or unsound practices or mismanagement of a member threatens loss to the Corporation or appears to affect adversely the solvency of the member, the Board may:

    (i) Order the member to correct the situation; or

    (ii) With the approval of the Commissioner and after giving the member notice and an opportunity for a hearing, revoke the membership of the credit union.

  (2) A credit union that is organized under federal law or the laws of any other state may withdraw from the Corporation by:

    (i) Giving written notice at least 1 year in advance; and

    (ii) Complying with the bylaws, rules, and regulations of the Corporation.

(d) Each member of the Corporation shall make the investments and pay the assessments, premiums, and other charges required for participation in the Corporation.

#### Section 7-108

(a) In the election of directors and in voting on any other matter at a meeting of the members of the Corporation, each member has one vote, to be cast by its delegate.

(b) A delegate may not vote on behalf of more than one member.

(c) A majority of the votes cast is sufficient to elect directors or decide any questions voted on by the members.

#### Section 7-109

(a) The powers of the Corporation shall be exercised by its Board of Directors.

(b) The Board of Directors consists of 11 directors elected by the members of the Corporation.

(c) Each director shall be a resident of this State.

(d)

  (1) Each director serves for a term of 4 years and until a successor is chosen and qualifies.

  (2) The terms of the directors shall be staggered as required by the terms provided for directors on July 1, 1988.

  (3) If a vacancy occurs as to an elected director, the Board of Directors shall elect a successor to fill the vacancy until the next annual meeting of the members of the Corporation. At the annual meeting, the members of the Corporation shall elect a successor to serve for the rest of the term and until a successor is elected and qualifies.

(e) A majority of the full authorized membership of the Board of Directors is a quorum.

(f) Each director is entitled to reasonable compensation, as set by the Board of Directors with the approval of the Commissioner.

#### Section 7-110

(a)

  (1) The Board of Directors of the Corporation:

    (i) Shall elect one of its members as chairman of the Board; and

    (ii) May appoint any officers and employees that it considers advisable.

  (2) The manner of election of the chairman and appointment of officers and their terms of office shall be as the bylaws provide.

(b) In accordance with the bylaws of the Corporation, the Board of Directors shall set the amount of the fidelity bonds of the officers and employees of the Corporation.

#### Section 7-111

(a) The Board of Directors of the Corporation shall adopt bylaws for the Corporation and rules and regulations to carry out the provisions of this title.

(b)

  (1) A bylaw, rule, or regulation becomes effective only after it is submitted to and approved by the Commissioner.

  (2) A bylaw, rule, or regulation is considered approved if the Commissioner does not notify the Corporation of disapproval and the reasons for it within 30 days after submission of the bylaw, rule, or regulation.

  (3) The Commissioner may disapprove a bylaw, rule, or regulation only if the Commissioner has reason to believe that:

    (i) It is contrary to the principles or purposes of this title; or

    (ii) It does not serve the best interests of the public.

#### Section 7-112

The Corporation may require independent audits and investigations of any member to determine the member's financial condition as it relates to insurance of share and deposit accounts. These audits and investigations shall be made at the expense of the credit union.

#### Section 7-113

(a) This section applies notwithstanding any other provisions of law.

(b)

  (1) The Corporation and the Commissioner may exchange information about credit unions.

  (2) The Commissioner shall make available to the Corporation all examinations of credit unions that are members of the Corporation.

(c) If a credit union is not incorporated under the laws of this State, the credit union may not be accepted as a member of the Corporation unless it submits a written statement from the agency that regulates it stating that the agency will cooperate with the Commissioner in carrying out the provisions of this title.

#### Section 7-114

The net earnings of the Corporation shall be accumulated and may not be returned to its members.

#### Section 7-115

The 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 Corporation under this title.

#### Section 7-116

The Corporation is exempt from all taxes imposed by this State or any of its political subdivisions under Sec.Sec. 20-101, 20-104, 20-108, 20-113 through 20-127, 20-601, 20-603 through 20-609, 20-805, and 20-806, and Title 20, Subtitles 3 through 5 of the Local Government Article, Title 6, Subtitle 1 of the Insurance Article, the Tax - General Article, or the Tax - Property Article.

#### Section 7-117

This title does not, and the Corporation may not, pledge the faith or credit of this State.

#### Section 7-118

(a) The Corporation may not accept an application from a credit union for new membership on or after the date that the Commissioner issues the first certificate of authority under Sec. 7-203 of this title.

(b) The Commissioner shall notify the Corporation of the date that the Commissioner issues the first certificate of authority under Sec. 7-203 of this title.

#### Section 7-119

(a) A credit union that is a member of the Corporation shall obtain primary share guaranty insurance with:

  (1) The National Credit Union Administration Share Insurance Program; or

  (2) A credit union share guaranty corporation regulated under Subtitle 2 of this title that is approved by the Commissioner to provide primary share guaranty insurance at least to the same extent and amount as provided by the National Credit Union Administration Share Insurance Program.

(b) A credit union that is a member of the Corporation shall comply with the provisions of subsection (a) of this section within 2 years after the date that the Commissioner issues the first certificate of authority under Sec. 7-203 of this title.

#### Section 7-120

(a)

  (1) In this section, "assets" means:

    (i) All net earnings of the Corporation accumulated under Sec. 7-114 of this subtitle; and

    (ii) All real or tangible or intangible personal property of the Corporation.

  (2) In this section, "assets" does not include member deposits.

(b) Within 2 years after the date that the Corporation no longer has any members, the Corporation shall complete the dissolution of the Corporation in accordance with the provisions of this section.

(c)

  (1) When the Corporation no longer has any members, the Corporation shall file articles of dissolution with the Commissioner and the State Department of Assessments and Taxation.

  (2) Except as provided in subsection (d) of this section, the Corporation is dissolved when the Commissioner accepts the Corporation's articles of dissolution.

(d)

  (1) The Corporation continues to exist for the purpose of collecting money owing to the Corporation, paying, satisfying, and discharging any existing debts or obligations, collecting and distributing the Corporation's assets, and doing all other acts required to liquidate and wind up the business and affairs of the Corporation.

  (2) After paying, satisfying, and discharging any existing debts or obligations, the Corporation shall transfer its remaining assets to a corporation that satisfies the requirements of subsection (e) of this section.

(e) The corporation receiving the assets under subsection (d)(2) of this section shall:

  (1) Be a nonprofit corporation that is exempt from federal taxation under Sec. 501(c)(3) of the Internal Revenue Code;

  (2) Have been organized:

    (i) For educational and charitable purposes; and

    (ii) To promote and publicize the interest and welfare of credit unions and their members in this State; and

  (3) Have been in existence and operating under a charter that includes the following purposes for at least 10 years:

    (i) Promoting the ideals of the credit union movement, including the cooperative nonprofit aspect, democratic aspect, the common bond, volunteerism, personalized service, cooperative spirit, and the encouragement of thrift and the creation of a source of credit at fair and reasonable rates;

    (ii) Helping to strengthen and develop credit unions serving low-income individuals;

    (iii) Improving and stimulating the ability of credit unions to provide low-cost consumer loans;

    (iv) Promoting the elasticity and flexibility of the resources of credit unions;

    (v) Conducting or funding research on all aspects of credit union operations and the credit union movement in general;

    (vi) Cooperating and assisting credit unions and local and national organizations and credit unions to improve the general welfare of the people through credit unions;

    (vii) Providing scholarships and awards to professionals and volunteers in the credit union movement; and

    (viii) Furthering the credit union movement and performing all necessary and properly related services and activities.

(f) The Corporation shall promptly notify the Commissioner following the completion of the liquidation and the winding up of the business and affairs of the Corporation.

#### Section 7-121

The Commissioner may require the Corporation to provide any information that the Commissioner deems necessary to determine whether the phase-out and dissolution of the Corporation are in accordance with the provisions of this part.

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Md. Code Ann., Fin. Inst. (as displayed at mgaleg.maryland.gov, October 16, 2026)