HB 860(As Sent to Governor) - 1997 Regular Session

MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Banks and Banking

By: Representative Guice

House Bill 860
(As Sent to Governor)

AN ACT TO AMEND SECTION 81-13-17, MISSISSIPPI CODE OF 1972, TO REVISE THE METHOD OF EXAMINATION OF CREDIT UNIONS BY THE COMMISSIONER OF BANKING AND CONSUMER FINANCE; TO AMEND SECTION 81-13-19, MISSISSIPPI CODE OF 1972, TO DELETE THE GRACE PERIOD GIVEN TO CREDIT UNIONS BEFORE AN ADMINISTRATIVE FINE IS IMPOSED FOR FAILING TO FURNISH REPORTS OR PAY FEES; TO AMEND SECTION 81-13-25, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE COMMISSIONER OF BANKING AND CONSUMER FINANCE TO IMPOSE AN ADMINISTRATIVE FINE AGAINST CREDIT UNIONS UPON FAILING TO TRANSMIT THE DIRECTORS' OATH OF OFFICE; TO CREATE A NEW CODE SECTION TO AUTHORIZE CREDIT UNIONS TO ESTABLISH A BRANCH OFFICE; TO CREATE A NEW CODE SECTION TO AUTHORIZE CREDIT UNIONS TO ESTABLISH ELECTRONIC BANKING TERMINALS; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 81-13-17, Mississippi Code of 1972, is amended as follows:

[Through July 1, 1997, Section 81-13-17 shall read as follows:]

81-13-17. Each credit union shall be examined at least once per eighteen-month period by the Commissioner of Banking and Consumer Finance. The commissioner may conduct other examinations and the commissioner or examiners of the Department of Banking and Consumer Finance shall at all times be given free access to all the books, papers, securities and other sources of information in respect to the credit union. For that purpose he shall have the power to subpoena and examine personally or through one (1) of his deputies, or examiners, duly authorized, witnesses on oath and documents pertaining to the business of the credit union. The fees for examination shall be determined by the commissioner by assessing the association according to the cost based on the average daily cost of all examiners of the department, plus actual and necessary expenses. The commissioner shall have the authority to prescribe supervision fees at the rate of Ten Cents (104) per One Thousand Dollars ($1,000.00) of assets, and not be less than Twenty Dollars ($20.00) nor more than Two Hundred Dollars ($200.00) a year for overhead expenses of the department in supervising the credit union * * *. The commissioner shall send each such credit union a statement of the amount due by it and shall specify how the same shall be paid. The fees shall be due and payable in accordance with the statement so furnished and shall be paid within ten (10) days after the date fixed for their payment. Such fees shall constitute a lien on the assets of the credit union until paid. Any such credit union failing to make payment within ten (10) days as herein provided shall be liable to a penalty of ten percent (10%) of the amount in default for each day thereafter.

In the event the commissioner's office, because of work load or other good sufficient cause, is unable to conduct an annual examination of a credit union as provided for in this section, the commissioner is hereby authorized to accept the examination of any credit union performed by the National Credit Union Administration or by any succession thereto * * *. However, in no case shall the commissioner be authorized to accept any such examination of any credit union performed by the NCUA or its successor for any two (2) consecutive eighteen-month periods.

[From and after July 2, 1997, Section 81-13-17 shall read as follows:]

SECTION 2. Section 81-13-19, Mississippi Code of 1972, is amended as follows:

[Through July 1, 1997, Section 81-13-19 shall read as follows:]

81-13-19. (1) * * * If it appears that any credit union is bankrupt or insolvent, or that it has violated any other provisions of law, or is in danger of loss due to mismanagement or fraud, the commissioner shall issue an order temporarily suspending the credit union's operations for not less than thirty (30) nor more than sixty (60) days. The board of directors shall be given notice by registered mail of such suspension, which notice shall include a list of the reasons for such suspension, or a list of the specific violations of law.

(2) Upon receipt of such suspension notice, the credit union shall cease all operations, except those operations authorized by the commissioner. The board of directors shall file with the commissioner a reply to the suspension notice, and may request a hearing to present a plan of corrective actions proposed if the credit union desires to continue operations. The board of directors may request that the credit union be declared insolvent and a liquidating agent be appointed.

(3) Upon receipt of evidence from the suspended credit union that the conditions causing the order of suspension have been corrected, the commissioner, upon finding that such conditions have been corrected, may revoke the suspension notice and permit the credit union to resume normal operations.

(4) If the commissioner, after issuing notice of suspension and providing an opportunity for a hearing, rejects the credit union's plan to continue operations, he may issue a notice of involuntary liquidation and appoint a liquidating agent. The commissioner shall continue his order suspending the credit union's operation until final determination or liquidation. The credit union may request the chancery court of the county in which the home office of the credit union is located to take such action as it may deem necessary under the law.

(5) If, within the suspension period, the credit union fails to answer the suspension notice or request a hearing, the commissioner may then revoke the credit union's charter, appoint a liquidating agent and liquidate the credit union.

[From and after July 2, 1997, Section 81-13-19 shall read as follows:]

SECTION 3. Section 81-13-25, Mississippi Code of 1972, is amended as follows:

[Through July 1, 1997, Section 81-13-25 shall read as follows:]

81-13-25. At an annual meeting the members shall elect a board of directors and a supervisory committee. The credit union's board of directors shall determine whether the credit union will: (1) have a credit committee elected by the membership; (2) have a credit committee appointed by the board; and/or (3) will hire loan officers. The board shall include this decision in their bylaws and the board shall determine and record in the minutes of a duly held meeting, the authority of the credit committee, if any, and/or the loan officers. Unless the number of members of the credit union is less than eleven (11), no member of the board shall be a member of either of said committees. All members of the board and committees and all officers shall be sworn to discharge their duties faithfully and shall hold their several offices for such terms as may be provided in the bylaws. The oath shall be subscribed by the individual taking it and certified by the officer before whom it is taken and shall * * * be transmitted within ten (10) days after the oath to the Commissioner of Banking and Consumer Finance and filed and preserved in his office. For any failure or delay in transmitting the oath, the credit union shall be subject to an administrative fine, which may be imposed by the commissioner, of Ten Dollars ($10.00) per day for each day the documents are not received.

[From and after July 2, 1997, Section 81-13-25 shall read as follows:]

SECTION 4. (1) Any state credit union may apply to the Commissioner of Banking and Consumer Finance for permission to establish a branch office. The application shall be in such a form as may be prescribed by the commissioner and shall be approved or denied by the commissioner within one hundred twenty (120) days of filing.

(2) The commissioner shall approve a branch application when all of the following criteria are met:

(a) The applicant has an examination rating of two (2) or higher;

(b) The applicant has capital ratios equal or exceeding the amount required by the insurer of deposit accounts;

(d) The applicant has demonstrated that its members would be well served by the branch.

(3) If the commissioner denies the branch application, the branch applicant will have the right of a hearing as prescribed in Section 81-13-1 for those applicants denied a new credit union.

SECTION 5. (1) For the purposes of this section, the following words shall have the meanings provided in this subsection unless the context otherwise requires:

(a) "Electronic terminal" means an unmanned electronic device owned or operated by a federally insured credit union through which a consumer may initiate an electronic fund transfer.

(b) "Electronic fund transfer" means any of the following:

(i) The withdrawal of cash from or the deposit of cash or checks into an unmanned electronic device, such as an automatic teller machine, but not including night depositories;

(ii) An application for or acceptance of a loan through use of an unmanned electronic device;

(iii) The transfer of funds between accounts through use of an unmanned electronic device; or

(iv) The issuance of a check by an unmanned electronic device.

(2) Any state credit union may apply to the Commissioner of Banking and Consumer Finance for permission to establish electronic terminals. The application shall be in such a form as may be prescribed by the commissioner. The commissioner shall approve the electronic terminal when all of the following criteria are met:

(a) The applicant has an examination rating of two (2) or higher;

(b) The applicant has capital ratios equal or exceeding the amount required by the insurer of deposit accounts;

(d) The applicant has demonstrated that its members would be well served by the electronic terminal.

(3) For the use of its electronic terminals connected to sharing networks or systems, a credit union may impose a fee if imposition of the fee is disclosed at a time and in a manner that allows a user to terminate or cancel the transaction without incurring the transaction fee. Such fee shall not exceed Two Dollars ($2.00) or four percent (4%) of the gross amount of the transaction, whichever is greater. An agreement to share electronic terminals shall not prohibit, limit or restrict the right of a credit union to charge such fees for the use of its electronic terminals as allowed by state or federal law, or require a credit union to limit or waive its rights or obligations under this section.

SECTION 6. This act shall take effect and be in force from and after its passage.