HB 316

Sponsor
Session
Regular Session 2018
Title
Credit Unions, regulation of; voting and notice requirements for board meetings, provided for, conversion of credit unions chartered in other states to Alabama state chartered credit union, provided for, access provided to certain third-party examination reports, executive session of boards, provided for, certain public disclosures, provided for, Secs. 5-17-22, 5-17-40, 5-17-45, 5-17-56, 5-17-60, am'd.
Description

Existing law provides for the regulation of credit unions

This bill would further provide voting and notice requirements for board meetings of credit unions

This bill would also provide for conversion of credit unions chartered under the laws of other states to Alabama state chartered credit unions

This bill would provide state chartered credit unions access to certain examination reports, audit reports, and other third-party reports under certain conditions

This bill would provide for the circumstances when the Credit Union Board could enter into executive session and would clarify the authority to disclose certain information to the extent necessary to exercise enforcement authority under certain conditions

To amend Sections 5-17-22, 5-17-40, 5-17-45, 5-17-56, and 5-17-60, Code of Alabama 1975, relating to regulation of credit unions; to provide voting and notice requirements for board meetings; to provide for the conversion of credit unions chartered in other states to Alabama state chartered credit unions; to provide state chartered credit unions access to certain reports under certain conditions; to provide circumstances for the Credit Union Board to enter into executive session; and to provide for certain public disclosures.

Subjects
Credit Unions
View Original PDF: HB 316 - Introduced - PDF

Existing law provides for the regulation of credit unions

This bill would further provide voting and notice requirements for board meetings of credit unions

This bill would also provide for conversion of credit unions chartered under the laws of other states to Alabama state chartered credit unions

This bill would provide state chartered credit unions access to certain examination reports, audit reports, and other third-party reports under certain conditions

This bill would provide for the circumstances when the Credit Union Board could enter into executive session and would clarify the authority to disclose certain information to the extent necessary to exercise enforcement authority under certain conditions

To amend Sections 5-17-22, 5-17-40, 5-17-45, 5-17-56, and 5-17-60, Code of Alabama 1975, relating to regulation of credit unions; to provide voting and notice requirements for board meetings; to provide for the conversion of credit unions chartered in other states to Alabama state chartered credit unions; to provide state chartered credit unions access to certain reports under certain conditions; to provide circumstances for the Credit Union Board to enter into executive session; and to provide for certain public disclosures.

Section 1

Sections 5-17-22, 5-17-40, 5-17-45, 5-17-56, and 5-17-60, Code of Alabama 1975, are amended to read as follows:

§5-17-22.

Any credit union, with the approval of the Administrator of the Alabama Credit Union Administration, may merge with another credit union, under the existing certificate of organization of the other credit union, pursuant to any plan agreed upon by the majority of each board of directors of each credit union joining in the merger. In addition to approval by the administrator and each board of directors, the membership of the merging credit union must also approve the merger plan in the following manner:

(1) At a meeting called for that purpose, notice of which purpose must be contained in the call, two thirds of those in attendance voting may vote to approve the merger plan. Voting must be conducted in accordance with the bylaws of the credit union. Notice of the meeting must have been mailed to the last known address of each member of the credit union The notice must be provided to the members at least 15 days prior to the date of the meeting.

(2) After agreement by the directors and approval by the members of the merging credit union, the president and secretary of the credit union shall execute a certificate of merger which shall set forth all of the following:

a. The time and place of the meeting of the board of directors at which the plan was agreed upon.

b. The vote in favor of the adoption of the plan.

c. A copy of the resolution or other action by which the plan was agreed upon.

d. The time and place of the meeting of the members at which the plan agreed upon was approved.

e. The vote by which the plan was approved by the members.

(3) Such certificate and a copy of the plan of merger agreed upon shall be forwarded to the administrator, certified by the administrator, and returned to both credit unions within 30 days.

(4) Upon return of the certificate from the administrator, all property, property rights and members' interest of the deed, endorsement, or other instrument of transfer, and all debts, obligations, and liabilities of the merged credit union shall be deemed to have been assumed by the surviving credit union under whose charter the merger was effected. The rights and privileges of the members of the merged credit union shall remain intact.

(5) A copy of the certificate approved by the Administrator of the Alabama Credit Union Administration shall be filed with the judge of probate of the county in which each credit union's certificate of organization is recorded.

(6) This section applies to credit unions organized under the laws of the State of Alabama. Federally chartered credit unions may be merged into Alabama organized credit unions, under the same conditions as Alabama credit unions; provided, that the merger plan is approved by the National Credit Union Administration or private insurance program or carrier.

(7) Credit unions organized under the laws of the State of Alabama may be merged into federally chartered credit unions under the same conditions as provided in this section; provided, that the merger plan is approved by the National Credit Union Administration or private insurance program or carrier.

(8) Credit unions organized under the laws of the State of Alabama may merge a state or federally chartered bank or thrift into the credit union under the same conditions as provided in this section, provided that the merger plan is approved, if required, by the appropriate state or federal regulator of the bank or thrift and federal insurer, the Federal Deposit Insurance Corporation.

(9) Credit unions organized under the laws of the State of Alabama may merge into a state or federally chartered bank or thrift under the same conditions as provided in this section, provided that the merger plan is approved by the resultant institution's chartering regulator and the federal insurer, the Federal Deposit Insurance Corporation.

(10) A federal credit union may be converted to a credit union chartered under the laws of Alabama and a state credit union may be converted to a federal credit union by adhering to the requirements for the conversion of a federal credit union to a state credit union as specified by the Federal Credit Union Act, presently 12 U.S.C. §1771(a)(1).

(11) A credit union chartered under the laws of another state may be converted to an Alabama state chartered credit union under state law and regulation. Conversion to an Alabama state chartered credit union shall be effective upon the written approval of the administrator. Notice of conversion shall be filed with the Secretary of State and the judge of probate of the county in which the credit union maintains its principal office.

§5-17-40.

(a) There shall be an Alabama Credit Union Administration which shall administer the laws of this state which regulate or otherwise relate to credit unions in the state. The authority of the Alabama Credit Union Administration to perform such functions shall be exclusive and all authority regarding credit unions which was previously vested in the State Banking Department is hereby vested in the Alabama Credit Union Administration.

(b) If any of the provisions of Chapter 17 of this title are inconsistent with any other general or special law, Chapter 17 of this title shall be controlling.

§5-17-45.

(a) The Legislature finds as fact and determines that the credit unions having their principal place of business in Alabama must keep pace with technological and other improvements constantly being made throughout the United States so as to enable Alabama credit unions to render better and more efficient services to their members. It is necessary and desirable that the administrator be given additional authority in these fields.

(b) The administrator is hereby authorized to expand powers of Alabama credit unions in order to accomplish both of the following:

(1) Accommodate or take advantage of changing technologies.

(2) Assure the ability of Alabama credit unions to be responsive in their business to the needs and conveniences demanded by credit union members through on-premises as well as off-premises operations; provided, that nothing in this section shall enable the administrator to authorize credit unions to engage in activities which are not properly incident to the business of credit unions nor to enable the administrator to authorize credit unions to engage in the business of offering financial services which are now prohibited to them.

No credit union having its principal place of business outside of Alabama may engage in credit union business in Alabama under the provisions of this section; provided that the administrator is authorized to enter into agreements with the appropriate regulatory authorities of other states; provided credit unions having their principal place of business in Alabama are given and may exercise reciprocal rights.

(c) The administrator is authorized to issue regulations under subsection (b) in the same manner as other regulations of the Alabama Credit Union Administration are adopted. Any Alabama credit union covered by the provisions of subsection (b) desiring to exercise any such expanded power must secure in advance written permission of the administrator. The administrator may prescribe the form or forms for such applications for permission and may impose reasonable conditions in granting such permission.

(d) The administrator may enter into supervisory or other agreements, some of which may be confidential in nature, with the Federal Reserve; the U.S. Treasury Department; the National Credit Union Administration; state credit union, banking, and other regulators; approved private insurance carriers; and other state or federal agencies and furnish to them for their use such reports of examination and other information in taking enforcement and other supervisory actions.

(e) Upon request by a state chartered credit union or its designee, any service provider or vendor providing mission critical services to the credit union shall provide any requested reports of examination, audit reports, or other third party reports of the service provider or vendor to the credit union or its designee. The credit union shall make the reports available for review by the administration. Mission critical services shall include those services defined by regulation as mission critical, and those services that involve access by the service provider or vendor to personally identifiable information as defined by the Gramm-Leach-Bliley Act, 15 U.S.C. Section 6809.

§5-17-56.

(a) The administrator shall comply with the provisions of the Alabama Open Meetings Law, Chapter 25A of Title 36. The board Credit Union Board shall meet not less than once every calendar year. Any meeting of the board Credit Union Board may be held at any place in the state where it is called to meet by the administrator.

(b) In order to comply with state and federal confidentiality requirements, at any meeting, the Credit Union Board may enter executive session to do any of the following:

(1) Protect the confidentiality of reports or information under Section 5-17-60 and any other provisions of this title.

(2) Review information concerning the condition and affairs of any proposed credit union, any credit union, any subsidiary or affiliate of a credit union, or several credit unions or their subsidiaries, or to review the personal or financial information of individuals or credit union members.

(3) Undertake any purpose for which a governmental body is permitted to go into executive session under the Alabama Open Meetings Act.

(4) Accomplish any other purpose of the Credit Union Board that requires it to receive or consider information that is confidential under this title.

(5) Comply with any other state or federal law requiring confidentiality.

(c) Confidential information under this title includes all information set forth in subsection (b), as well as other information designated as confidential in this title or under state or federal law, and any other information as determined by the administrator.

§5-17-60.

(a) Except as otherwise provided in this section title or under state or federal law, the administrator, a member of the Credit Union Board, or an examiner or other state employee may not disclose the condition and affairs of any credit union, its supervisory committee, or subsidiaries or other affiliates, ascertained by an examination of such credit union or affiliates, or report or give out nonpublic personal information of credit union members, except as authorized or required by law; provided that this section shall not be construed to prevent examiners and other employees from reporting such information to the administrator or such persons as the administrator may lawfully designate.

(b) Notwithstanding subsection (a), the administrator, at the administrator's discretion, may disclose any information otherwise protected under this section to the members of the Credit Union Board and confer with the members of the Credit Union Board regarding the same and may also disclose publicly such information as is and to the extent necessary to the exercise of enforcement authority or the taking of other supervisory actions pursuant to this title.

(c) The administrator may furnish to the National Credit Union Administration, or to any other supervisory agency of the United States, or to a private share insurance carrier presently providing deposit share insurance to the subject credit union, or to other federal or state agencies with which the administrator has entered into an agreement pursuant to subsection (d) of Section 5-17-45, reports of examination and other data as the administrator deems advisable.

(d) No disclosure may be made by any agency or entity furnished with reports of examination or other data pursuant to subsection (c) to any third parties without the prior consent of the administrator. Any disclosure permitted by the administrator shall be subject to such conditions and restrictions as the administrator may require or as otherwise required by this title.

(e) The administrator may also furnish copies of his or her reports of examination and any other information to the board of directors of the credit union, its supervisory committee, subsidiary, or affiliate.

(f) Any reports or information furnished or disclosed under this section shall remain the property of the Alabama Credit Union Administration and, except as provided in this section, may not be disclosed to any person other than the officers, directors, attorneys, and auditors of the credit union, its supervisory committee, subsidiary, affiliate, consultants, or advisors to the credit union or affiliate, and, subject to appropriate confidentiality agreements, persons considering the possible acquisition of, merger with, or investment in the credit union or affiliate. A person receiving such reports or information may not:

(1) Use the report or information other than in connection with the credit union or affiliate, and its business and affairs.

(2) Retain that report or information or copies thereof.

(3) Except as expressly permitted by law, disclose such report or information to any person not authorized to receive the same under this subsection.

(g) All reports of examination, records reflecting action of a credit union, its supervisory committee, subsidiary, or affiliate, taken pursuant thereto, and records and minutes of meetings of the Credit Union Board relating to a credit union or several credit unions, supervisory committee, subsidiary, or affiliate, shall be confidential and shall not be subject to subpoena or inspection except by subpoena from a grand jury served on the administrator."

Section 2

This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

No articles found.
Action Date Chamber Action
March 22, 2018HForwarded to Governor on March 22, 2018 at 2:22 p.m. on March 22, 2018.
March 22, 2018HAssigned Act No. 2018-470.
March 22, 2018HClerk of the House Certification
March 22, 2018HEnrolled
March 22, 2018SSignature Requested
March 22, 2018HPassed Second House
March 22, 2018SMotion to Read a Third Time and Pass adopted Roll Call 1044
March 22, 2018SThird Reading Passed
March 20, 2018SRead for the second time and placed on the calendar
March 13, 2018SRead for the first time and referred to the Senate committee on Governmental Affairs
March 13, 2018HMotion to Read a Third Time and Pass adopted Roll Call 754
March 13, 2018HThird Reading Passed
February 22, 2018HRead for the second time and placed on the calendar
January 25, 2018HRead for the first time and referred to the House of Representatives committee on Financial Services
2018-03-22
Chamber: Senate
Result: Passed
2018-02-27
Chamber: House
Result: Passed
2018-02-27
Chamber: House
Result: Passed
2018-02-27
Chamber: House
Result: Passed
2018-03-13
Chamber: House
Result: Passed