SB 306
Modifies laws relating to the administration of credit unions
LR Number:
Last Action:
7/5/2011 - Signed by Governor
Journal Page:
SS SB 306
Calendar Position:
Effective Date:
August 28, 2011
House Handler:

Current Bill Summary

SS/SB 306 - This act modifies and updates the law relating to credit unions.

The act updates the credit union statutes to designate the Department of Insurance, Financial Institutions and Professional Registration as the department overseeing credit unions and designates the Director of Credit Unions as the head of the Division of Credit Unions.

The director of the Division of Credit Unions and division employees and special agents shall take an oath of confidentiality and are barred from disclosing certain information. Certain exceptions are enumerated. Those individuals, other than the members of the credit union commission, who examine credit unions or make official decisions regarding credit unions shall not be an officer or director of, or receive payment from, a credit union the division regulates.

In the course of an investigation, the director may compel the production of documents and the attendance of persons having knowledge of pertinent issues, administer oaths, and seek enforcement of an administrative subpoena.

Officers, directors, and employees shall not be charged with libel, slander, or defamation for good faith communications with the director or employees of the division.

The act updates the process by which directors, officers, and employees may be removed from office or suspended by the director of the division of credit unions. The director of the division shall deliver a notice of intention to remove or prohibit the party from acting in connection with a credit union stating the grounds for such action and the time and place for a hearing for removal or prohibition. Those suspended or prohibited from participating in the affairs of the credit union may file a stay of such suspension or prohibition in circuit court.

If suspensions cause a lack of a quorum for a board of directors, the board may function under those not suspended. If all the directors are suspended, the director of the division shall appoint temporary directors to take their place.

This act removes a provision of law restricting credit unions from issuing certain loans to directors and credit and supervisory committee members exceeding $25,000.

The act removes provisions establishing requirements for reserve funds and instead requires credit unions to maintain reserves sufficient to qualify for federal share insurance and satisfy regulations relating to reserve fund requirements.

Currently, notice of a meeting at which a plan for merger is to be submitted shall be as provided in the credit unions bylaws or by letter to shareholders. This act requires notice to be mailed to each member between 14 and 30 days before the meeting. Members may vote remotely by electronic ballot. The same procedures shall be allowed when a state-chartered credit union votes to convert to a federal credit union.

This act is similar to HB 465 (2011).