Credit Unions

KRS tit. XXV, ch. 286, subtit. 6

in effect

KRS 286.6-005 Definitions

286.6-005. Definitions As used in this subtitle, unless the context otherwise requires: (1) "Credit union" means a cooperative, nonprofit association, incorporated under this subtitle, for the purposes of encouraging thrift among its members, creating a source of credit at a fair and reasonable rate of interest, and providing an opportunity for its members to use and control their own money on a democratic basis in order to improve their economic and social condition. (2) "Commissioner" means the commissioner of financial institutions. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 714, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 1, effective July 13, 1984. Formerly codified as KRS 290.005 Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-012 Administrative hearing request

286.6-012. Administrative hearing request Any party aggrieved by a decision of the commissioner under the provisions of KRS 286.6-015, 286.6-035, 286.6-055, 286.6-065, 286.6-700, or 286.6-710 may request an administrative hearing which shall be conducted in accordance with KRS Chapter 13B. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 715, effective July 15, 2010. -- Created 1996 Ky. Acts ch. 318, sec. 219, effective July 15, 1996. Formerly codified as KRS 290.012. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-015 Organization procedure

286.6-015. Organization procedure (1) Any seven (7) or more residents of this state, of legal age, who have a common bond referred to in KRS 286.6-107 may organize a credit union and become charter members thereof by complying with this section. (2) The subscribers shall execute in duplicate articles of incorporation and agree to the terms thereof, which articles shall state: (a) The name, which shall include the words "credit union" and which shall not be the same as that of any other credit union in this state, and the location where the proposed credit union is to have its principal place of business; (b) That the existence of the credit union shall be perpetual; (c) The par value of the shares of the credit union; and (d) The names and addresses of the subscribers to the articles of incorporation, and the number of shares subscribed to by each, which shall be determined by the board. (3) The subscribers shall prepare and adopt bylaws for the general government of the credit union, consistent with this subtitle, and execute the same in duplicate. (4) The subscribers shall select at least five (5) qualified persons who agree to serve on the board of directors, and at least three (3) other qualified persons who agree to serve on the supervisory committee. A signed agreement to serve in these capacities until the first annual meeting or until the election of their successors, whichever is later, shall be executed by those who so agree. (5) The subscribers shall forward any required fee, the articles of incorporation, the bylaws and the agreements to serve to the commissioner, who shall act upon the application for a charter within thirty (30) days. The commissioner shall issue a certificate of approval, if the articles and bylaws are in conformity with this subtitle and the commissioner is satisfied that: (a) The characteristics of the sponsoring group are favorable to the economic viability of such credit union; (b) The standing and character of the proposed organizers are such as to give assurance that its affairs will be properly administered; and (c) The share and deposit insurance requirements of KRS 286.6-405 will be met. (6) The commissioner shall return a copy of the bylaws and the articles to the applicants or their representatives, which shall be preserved in the permanent files of the credit union. (7) The subscribers for a credit union charter may not transact any business until formal approval of the charter has been received. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 716, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 2, effective July 13, 1984. Formerly codified as KRS 290.015. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-025 Form of articles and bylaws

286.6-025. Form of articles and bylaws In order to simplify the organization of credit unions, the commissioner shall cause to be prepared a form of articles of incorporation and a form of bylaws, consistent with this subtitle, which may be used by credit union incorporators for their guidance. Such articles of incorporation and bylaws shall be available without charge to persons desiring to organize a credit union. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 717, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 3, effective July 13, 1984. Formerly codified as KRS 290.025. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-035 Amendment of articles of incorporation or bylaws

286.6-035. Amendment of articles of incorporation or bylaws (1) The articles of incorporation or the bylaws may be amended as provided in the bylaws. Amendments to the articles of incorporation or bylaws shall be submitted to the commissioner who shall approve or disapprove the amendments within sixty (60) days. (2) Amendments shall become effective upon approval in writing by the commissioner. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 718, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 4, effective July 13, 1984. Formerly codified as KRS 290.035. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-045 Use of name exclusive

286.6-045. Use of name exclusive No person, corporation, partnership or association, other than a legally chartered credit union, an association of credit unions, or an organization, corporation, or association whose membership or ownership is primarily confined or restricted to credit unions or credit union organizations, may use a name or title containing the phrase "credit union" or any derivation thereof, represent itself as a credit union, or conduct business as a credit union. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 5, effective July 13, 1984. Formerly codified as KRS 290.045. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-055 Office facilities

286.6-055. Office facilities (1) A credit union may change its principal place of business within this state upon written authorization by the commissioner. If the commissioner has not notified a credit union of his or her action on an application to change the place of business within fifteen (15) calendar days of the date the application was received by the commissioner, the credit union may proceed with the change in its place of business. (2) A credit union may maintain service facilities, including automated teller machines, at locations other than its principal office upon written authorization by the commissioner or as permitted by administrative regulation. The maintenance of these facilities must be reasonably necessary to furnish service to its members. (3) A credit union may join with one (1) or more credit unions in the operation of a service facility to meet member needs, including an automated teller machine, upon written authorization by the commissioner or as permitted by administrative regulation. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 719, effective July 15, 2010. -- Amended 2000 Ky. Acts ch. 157, sec. 7, effective July 14, 2000. -- Created 1984 Ky. Acts ch. 408, sec. 6, effective July 13, 1984. Formerly codified as KRS 290.055. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-065 Out-of-state credit unions

286.6-065. Out-of-state credit unions (1) A credit union organized in another state may conduct business as a credit union in this state with the approval of the commissioner. The commissioner shall find that the out-of-state credit union: (a) Is a credit union organized under laws similar to this subtitle; (b) Is financially solvent; (c) Has account insurance comparable to that required for credit unions incorporated under this subtitle; (d) Is effectively examined and supervised by the supervisory authority of the state in which it is organized; and (e) Needs to conduct business in this state to adequately serve its members in this state. (2) The out-of-state credit union shall agree to: (a) Grant loans at rates not in excess of the rates permitted for credit unions incorporated under this subtitle; (b) Comply with the same consumer protection provisions that credit unions incorporated under this subtitle must obey; (c) Designate and maintain an agent for the service of process in this state; and (d) Submit copies of reports to the commissioner when requested. (3) The commissioner may examine the out-of-state credit union or enter into cooperative or reciprocal agreements with the out-of-state credit union's regulatory authority for periodic examinations. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 720, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 7, effective July 13, 1984. Formerly codified as KRS 290.065. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-070 Supervision by commissioner

286.6-070. Supervision by commissioner Credit unions shall be under the supervision of the commissioner, who may make general rules and regulations, and special rulings, demands and findings necessary for the proper conduct and regulation of the business. Such action by the commissioner shall be in addition to and not in conflict with the provisions of this subtitle. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 721, effective July 15, 2010. -- Created 1986 Ky. Acts ch. 193, sec. 1, effective July 15, 1986. -- Amended 1974 Ky. Acts ch. 366, sec. 1. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 883g-4, 883g-6. Formerly codified as KRS 290.070. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-075 General powers of credit union

286.6-075. General powers of credit union A credit union organized under this subtitle may: (1) Make contracts; (2) Sue and be sued; (3) Adopt and use a common seal and alter same; (4) Acquire, lease, hold, assign, pledge, hypothecate, sell and otherwise dispose of property, either in whole or in part, necessary or incidental to its operations; (5) Offer its members and other credit unions various classes of shares, share certificates, deposits or deposit certificates, upon written authorization of the commissioner; (6) Lend its funds to its members as hereinafter provided; (7) Borrow from any source provided that a credit union must secure approval from the commissioner in writing of its intention to borrow in excess of an aggregate of forty percent (40%) of its capital; (8) Discount or sell any of its assets, and purchase the assets of another credit union, subject to the approval of the commissioner; (9) Make deposits in legally chartered banks, savings banks, savings and loan associations, trust companies, and other credit unions, including corporate credit unions, and invest funds as otherwise provided in KRS 286.6-585; (10) Hold membership in other credit unions organized under this subtitle or other acts, and in associations and organizations controlled by or fostering the interests of credit unions, including a central liquidity facility organized under state or federal law; (11) Engage in activities and programs as requested by the federal government or by this state or any agency or political subdivision thereof, when approved by the commissioner and not inconsistent with this subtitle; and (12) Act as fiscal agent for and receive payments on shares and deposits from the federal government, this state, or any agency or political subdivision thereof. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 722, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 8, effective July 13, 1984. Formerly codified as KRS 290.075. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-085 Incidental powers

286.6-085. Incidental powers A credit union may exercise such incidental powers as are granted corporations organized under the laws of this state, including such as are convenient or useful to enable it to promote and carry on most effectively its purposes. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 9, effective July 13, 1984. Formerly codified as KRS 290.085. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-090 Reports

286.6-090. Reports Each credit union shall make a report of its condition to the commissioner, on blank forms to be supplied by the Department of Financial Institutions on the dates of the calls made to state banks. Notice of the calls shall be sent out by the commissioner. The reports shall be verified by the oath of a majority of the members of the supervisory committee, or by the oath of the president and treasurer or secretary, and further reports shall be made as the commissioner at any time demands. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 723, effective July 15, 2010. -- Amended 1946 Ky. Acts ch. 191, sec. 13. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883g-6. Formerly codified as KRS 290.090. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-092 Failure to make reports or pay charges -- Notice of charges -- Injunctions

286.6-092. Failure to make reports or pay charges -- Notice of charges -- Injunctions (1) If any credit union fails to make the report prescribed by KRS 286.6-090 within fifteen (15) days after it is due, or fails to pay the charges required by this subtitle, including the charges for delay in filing reports, the commissioner shall give notice to the credit union of his intention to revoke the certificate of approval of the corporation. If failure continues for fifteen (15) days after the notice, the commissioner may, in his discretion, revoke the certificate of approval and take possession of the property and business of the credit union until such time as the commissioner permits it to resume business, or until its affairs are liquidated. (2) If the commissioner has knowledge or reasonable cause to believe that any credit union, or any director, officer, employee, agent, or other person participating in the conduct of the affairs of the credit union has engaged in violations of law, or charter, bylaw, or administrative regulation of the department, or in unsafe or unsound business practices, or a breach of any written agreement with the department, the commissioner may issue and serve upon the credit union, director, officer, employee, agent, or other person a notice of charges containing a statement of facts with respect to alleged violations or practices and shall fix the time and place at which an administrative hearing shall be held to determine whether an order to cease and desist should issue against the credit union, director, officer, employee, agent, or other person. The hearing shall be conducted in accordance with KRS Chapter 13B. (3) Unless the party or parties so served shall appear at the hearing personally or by a duly-authorized representative, they shall be deemed to have consented to the issuance of the cease and desist order. (4) If there is consent, or if upon the record made at any hearing the commissioner shall find that any violation or unsafe or unsound practice specified in the notice of charges has been established, the commissioner may issue and serve upon the credit union, director, officer, employee, agent, or other person a final order to cease and desist from any violation or practice and, further, to take affirmative action to correct the conditions resulting from any violation or practice. (5) If the commissioner shall determine that the violation or practice, as specified in the notice of charges pursuant to subsection (2) of this section, or the continuation thereof, is likely to cause insolvency or substantial dissipation of assets or earnings of the credit union, or is likely to otherwise seriously prejudice the interests of its members, the commissioner may issue an emergency order pursuant to KRS 13B.125 requiring the credit union, director, officer, employee, agent, or other person to immediately upon service cease and desist from any violation or practice. (6) Unless set aside, limited, or suspended, as provided by subsection (7) of this section, an emergency cease and desist order shall remain effective and enforceable pending completion of the administrative hearing. (7) Within ten (10) days after service of an emergency cease and desist order, the party or parties served may apply to the Circuit Court of the residence of the individual or of the principal office of the credit union for an injunction setting aside, limiting, or suspending the enforcement, operation, or effectiveness of the order pending completion of an administrative hearing, and the court shall have jurisdiction to issue an injunction. (8) In the case of violation or threatened violation of, or failure to obey, an emergency cease and desist order or a cease and desist order issued pursuant to this section, the commissioner may apply to the Circuit Court of the residence of the individual or of the principal office of the credit union for an injunction to enforce the order, and it shall be the duty of the court to issue the injunction. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 724, effective July 15, 2010. -- Amended 1996 Ky. Acts ch. 318, sec. 220, effective July 15, 1996. -- Amended 1988 Ky. Acts ch. 195, sec. 1, effective July 15, 1988. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883g-6. Formerly codified as KRS 290.280 and 290.092. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-095 Rules of commissioner

286.6-095. Rules of commissioner Notwithstanding any other provision of law, the commissioner may make reasonable rules authorizing credit unions to exercise any of the powers conferred upon federal credit unions, if the commissioner deems it reasonably necessary for the well-being of such credit unions. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 725, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 10, effective July 13, 1984. Formerly codified as KRS 290.095. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-100 Supervision by commissioner -- Financial reports -- Examination -- Fees

286.6-100. Supervision by commissioner -- Financial reports -- Examination -- Fees (1) Credit unions shall: (a) Be under the supervision of the commissioner; (b) File financial reports with the commissioner as specified by administrative regulation, but no less frequently than annually; (c) Be subject to examination by any person designated by the commissioner; and (d) Pay the following fees to the commissioner: 1. For each credit union subject to supervision and examination by the commissioner, there shall be an annual fee based on the assets of the credit union, as reported to the department by the credit union as of December 31 of the previous year. The fee schedule shall be: a. At the rates necessary to carry out the duties of the department; b. Reasonably related to the costs incurred by the department in regulating credit unions; and c. Set by the commissioner by promulgating an administrative regulation; and 2. Any fees for extraordinary services performed by the department for a particular credit union. Fees assessed pursuant to this subparagraph shall be determined upon the basis of fair compensation for time and actual expense. (2) In lieu of the examination provided for in this section, the commissioner may accept any examination made by the National Credit Union Administration. One (1) copy of the examination report shall be promptly submitted to the commissioner for processing and analysis by the department. (3) When, in the judgment of the commissioner, the condition of any credit union organized under the provisions of this subtitle renders it necessary or expedient to make an examination or to devote any extraordinary attention to its affairs, the commissioner shall cause that work to be done. A full and complete copy of the report of all examinations shall be furnished to the credit union so examined. The report of examination shall be presented by the president of the credit union to the board of directors at its next regular or special meeting. Effective:June 29, 2017 History: Amended 2017 Ky. Acts ch. 87, sec. 3, effective June 29, 2017. -- Amended 2010 Ky. Acts ch. 24, sec. 726, effective July 15, 2010. -- Amended 1982 Ky. Acts ch. 352, sec. 1, effective July 15, 1982. -- Amended 1962 Ky. Acts ch. 264, sec. 1. -- Amended 1950 Ky. Acts ch. 177, sec. 1. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883g-6. Formerly codified as KRS 290.100. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-105 Commonwealth or its employees not liable for failure to disclose financial condition of credit union

286.6-105. Commonwealth or its employees not liable for failure to disclose financial condition of credit union In undertaking the examination of any credit union, neither the Commonwealth of Kentucky, the commissioner of the Department of Financial Institutions, nor any examiner employed by the Commonwealth shall become liable to any depositor, investor, or other obligor of said credit union by reason of said examination or omission of said examination to fully and effectively disclose the financial condition of said credit union, it being the policy of the Commonwealth of Kentucky that such examinations as are required by KRS 286.6-100 are for the purpose of determining compliance with state law and not for the purpose of protecting or guaranteeing the depositors, investors or other obligors of said credit unions. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 727, effective July 15, 2010. -- Created 1980 Ky. Acts ch. 357, sec. 3, effective July 15, 1980. Formerly codified as KRS 290.105. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-107 Membership defined

286.6-107. Membership defined (1) The membership of a credit union shall be limited to and consist of the subscribers to the articles of incorporation and such other persons within the common bond set forth in the bylaws as have been duly admitted members, have paid any required entrance fee or membership fee, or both, have subscribed to one (1) or more shares, and have paid the initial installment thereon, and have complied with such other requirements as the articles of incorporation or bylaws specify. (2) Credit union membership shall be limited to persons having a common bond of similar occupation, association or interest. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 11, effective July 13, 1984. Formerly codified as KRS 290.107. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-115 Tax exemption

286.6-115. Tax exemption (1) The participation by a credit union in any government program providing unemployment social security, old age pension or other benefits shall not be deemed a waiver of the taxation exemption hereby granted. (2) A credit union shall be deemed an institution for savings, and shall not be subject to taxation except as to real estate owned. The shares of credit unions shall not be subject to any stock transfer tax, either when issued or when transferred from one (1) member to another. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 12, effective July 13, 1984. Formerly codified as KRS 290.115. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-125 Retention of membership

286.6-125. Retention of membership Members who leave the field of membership may be permitted to retain their membership in the credit union, under reasonable standards established by the board of directors. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 13, effective July 13, 1984. Formerly codified as KRS 290.125. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-135 Liability of members

286.6-135. Liability of members The members of the credit union shall not be personally or individually liable for the payment of its debts. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 14, effective July 13, 1984. Formerly codified as KRS 290.135. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-145 Annual meeting

286.6-145. Annual meeting (1) The annual meeting and any special meetings of the members of the credit union shall be held at the time, place, and in the manner indicated by the bylaws. (2) At all such meetings a member shall have but one (1) vote, irrespective of his shareholding. No member may vote by proxy, but a member may vote by absentee ballot if the bylaws of the credit union so provide. (3) A society, association, copartnership or corporation having membership in the credit union may be represented and have its vote cast by one (1) of its members or shareholders, provided such person has been so authorized by the organization's governing body. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 15, effective July 13, 1984. Formerly codified as KRS 290.145. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-155 Board of directors -- Supervisory committee -- Simultaneous appointments prohibited

286.6-155. Board of directors -- Supervisory committee -- Simultaneous appointments prohibited (1) The credit union shall be directed by a board consisting of an odd number of directors, at least five (5) in number, to be elected at the annual members' meeting by and from the members. All members of the board shall hold office for such terms as the bylaws provide. (2) The board of directors shall appoint a supervisory committee of not less than three (3) persons at the organization meeting held within thirty (30) days following each annual meeting of the members for such terms as the bylaws provide. No member of the board of directors shall be appointed to the supervisory committee. (3) The board of directors shall appoint a credit committee consisting of an odd number, not less than three (3), for such terms as the bylaws provide, or in lieu of a credit committee, a credit manager. Effective: July 15, 1988 History: Amended 1988 Ky. Acts ch. 195, sec. 2, effective July 15, 1988. -- Created 1984 Ky. Acts ch. 408, sec. 16, effective July 13, 1984. Formerly codified as KRS 290.155. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-165 Record of officials

286.6-165. Record of officials Within fifteen (15) days after election or appointment, a record of the names and addresses of the members of the board, committees and all officers of the credit union shall be filed with the commissioner on forms provided by the department. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 728, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 17, effective July 13, 1984. Formerly codified as KRS 290.165. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-175 Vacancies

286.6-175. Vacancies The board of directors shall fill any vacancies occurring in the board until successors elected at the next annual meeting have qualified. The board shall also fill vacancies in the credit and supervisory committees. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 18, effective July 13, 1984. Formerly codified as KRS 290.175. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-185 Confidentiality

286.6-185. Confidentiality (1) A credit union has a special obligation of confidentiality to its members; therefore, any contrary provisions of KRS Chapter 271B notwithstanding, a credit union shall be obligated to provide a shareholder only names and addresses of its member shareholders. (2) No officer or director of a credit union or employee of the department shall release any information contained in the report of examination, except so far as necessary in the performance of his official duties as provided by law. (3) The department may furnish to and exchange information and reports with officials and examiners of other properly authorized state or federal regulatory authorities. (4) Every official report concerning a credit union and every report of an examination shall be prima facie evidence of the facts therein stated for all purposes in any action in which the department or credit union is a party. Such reports shall not be made public except when required in proper legal proceedings. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 729, effective July 15, 2010. -- Amended 1988 Ky Acts ch. 23, sec. 183, effective January 1, 1989 -- Amended 1986 Ky. Acts ch. 193, sec. 2, effective July 15, 1986. -- Created 1984 Ky. Acts ch. 408, sec. 19, effective July 13, 1984. Formerly codified as KRS 290.185. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-195 Pecuniary interest of officer

286.6-195. Pecuniary interest of officer No director, committee member, officer, agent or employee of the credit union shall in any manner, directly or indirectly, participate in the deliberation upon or the determination of any question affecting his pecuniary interest or the pecuniary interest of any corporation, partnership, or association (other than the credit union) in which he is directly or indirectly interested. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 20, effective July 13, 1984. Formerly codified as KRS 290.195. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-205 Officers of board

286.6-205. Officers of board (1) At their organization meeting held within thirty (30) days following each annual meeting of the members, the directors shall elect from their own number a chairman of the board, one (1) or more vice chairmen, a treasurer, and a secretary. The treasurer and the secretary may be the same individual. (2) The terms of the officers shall be one (1) year, or until their successors are chosen and have duly qualified. (3) The duties of the officers shall be prescribed in the bylaws. (4) The board of directors shall appoint a president to act as general manager of the credit union and be in active charge of its operations. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 21, effective July 13, 1984. Formerly codified as KRS 290.205. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-215 Authority of directors

286.6-215. Authority of directors The board of directors shall have the general direction of the business affairs, funds, and records of the credit union. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 22, effective July 13, 1984. Formerly codified as KRS 290.215. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-225 Specific duties of board

286.6-225. Specific duties of board It shall be the duty of the board of directors to: (1) Act upon applications for membership or to appoint one (1) or more membership officers to approve applications for membership under such conditions as the board prescribes. A record of the actions taken by a membership officer on applications shall be available to the board of directors for inspection. A person denied membership by a membership officer may appeal the denial to the board; (2) Purchase a blanket fidelity bond, in accordance with any rules and regulations of the commissioner, to protect the credit union against losses caused by occurrences covered therein such as fraud, dishonesty, forgery, embezzlement, misappropriation, misapplication, or unfaithful performance of duty by a director, officer, employee, member of a committee, attorney-at-law or other agent; (3) Determine from time to time the interest rate or rates, consistent with this subtitle, which shall be charged on loans and to authorize any interest refunds on such classes of loans and under such conditions as the board prescribes; (4) Establish the policies of the credit union with respect to the granting of loans and the extending of lines of credit, including the maximum amount which may be loaned to any one (1) member; (5) Establish different types or classes of shares; (6) Declare dividends on shares and share certificates in the manner and form as provided in the bylaws; and determine the interest rate or rates which will be paid on deposits and deposit certificates; (7) If deemed desirable, limit the number of shares and the amount of share certificates, deposits and deposit certificates which may be owned by a member. Any such limitation shall apply alike to all members; (8) Have charge of the investment of funds, except that the board may designate an investment committee or any qualified individual to have charge of making investments under conditions established by the board; (9) Authorize the employment of such persons necessary to carry on the business of the credit union, including the credit manager, loan officers and auditing assistants requested by the supervisory committee, and fix the compensation, if any, of the president; (10) Approve an annual operating budget for the credit union, which shall include provision for the compensation of employees; (11) Authorize the conveyance of property; (12) Authorize contributions to civic, charitable or service organizations, subject to regulations of the commissioner; (13) Borrow or lend money to carry on the functions of the credit union; (14) Designate a depository or depositories for the funds of the credit union; (15) Suspend any or all members of the credit or supervisory committee for failure to perform their duties; (16) Appoint any special committees deemed necessary; and (17) Perform such other duties as the members from time to time direct, and perform or authorize any action not inconsistent with this subtitle and not specifically reserved by the bylaws for the members. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 25, effective July 13, 1984. Formerly codified as KRS 290.225. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-235 Executive committee

286.6-235. Executive committee The board of directors may appoint an executive committee, consisting of not less than three (3) directors, which may be authorized to act for the board in all respects, subject to any conditions or limitations prescribed by the board. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 23, effective July 13, 1984. Formerly codified as KRS 290.235. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-245 Meetings of board or executive committee

286.6-245. Meetings of board or executive committee Each month either the board of directors or the executive committee shall meet. These bodies shall meet on other occasions as often as is necessary. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 24, effective July 13, 1984. Formerly codified as KRS 290.245. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-255 Credit committee

286.6-255. Credit committee (1) A credit committee shall have the general supervision of all loans to members, unless it is dispensed with as provided in KRS 286.6-265. (2) The credit committee shall meet as often as the business of the credit union requires to consider applications for loans and review the work of the loan officers. No loan shall be made unless it is approved by a majority of the committee who are present at the meeting at which the application is considered. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 26, effective July 13, 1984. Formerly codified as KRS 290.255. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-265 Credit manager

286.6-265. Credit manager The credit committee may be dispensed with in the bylaws, and a credit manager, under the general supervision of the president, may be empowered to approve or disapprove loans subject to the policies and conditions prescribed by the board of directors. The president may serve as the credit manager. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 27, effective July 13, 1984. Formerly codified as KRS 290.265. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-275 Loan officers -- Appeal from disapproval of loan

286.6-275. Loan officers -- Appeal from disapproval of loan (1) The credit committee may appoint one (1) or more loan officers and delegate the power to approve or disapprove loans, subject to such limitations or conditions as the credit committee prescribes. (2) Where a credit manager is provided in lieu of a credit committee, the credit manager may appoint one (1) or more loan officers with the power to approve or disapprove loans, subject to such limitations or conditions as the credit manager prescribes. (3) A member whose application was disapproved by a loan officer may appeal such action to the credit committee or credit manager, as appropriate under the bylaws. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 28, effective July 13, 1984. Formerly codified as KRS 290.275. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-285 Annual audit

286.6-285. Annual audit (1) Unless the credit union has been audited by a licensed public accountant or other qualified person or firm, the supervisory committee shall make or cause to be made a comprehensive annual audit of the books and affairs of the credit union. It shall submit a report of each annual audit to the board of directors and the commissioner and a summary of that report to the members at the next annual meeting of the credit union. (2) The supervisory committee shall make or cause to be made such supplementary audits, examinations or verifications of members' accounts as it deems necessary or as are required by the commissioner or by the board of directors, and submit reports of these supplementary audits to the board of directors. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 730, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 29, effective July 13, 1984. Formerly codified as KRS 290.285. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-296 Suspension and removal of officers -- Review of such actions -- Injunction

286.6-296. Suspension and removal of officers -- Review of such actions -- Injunction (1) The supervisory committee by a unanimous vote may suspend any member of the credit committee and shall report such action to the board of directors for appropriate action. (2) The supervisory committee by a unanimous vote may suspend any officer or member of the board of directors until the next members' meeting, which shall be held not less than seven (7) nor more than twenty-one (21) days after such suspension. At such meeting the suspension shall be acted upon by the members. (3) Any member of the supervisory committee may be removed by the board of directors for failure to perform his duties in accordance with this subtitle, the articles of incorporation, or the bylaws. (4) If the commissioner shall determine that any officer or director of a credit union has committed any violation of law, administrative regulation, or of a cease and desist order which has become final, or has engaged in or participated in any unsafe or unsound practice in connection with the credit union, or has committed or engaged in any act, omission, or practice which constitutes a breach of his fiduciary duty as such officer or director, and the commissioner determines that the credit union has suffered or will probably suffer substantial financial loss or other damages or that the interests of its members could be seriously prejudiced by reason of such violation or practice or breach of fiduciary duty, or that the director or officer has received financial gain by reason of the violation or practice or breach of fiduciary duty, the commissioner may serve upon such director or officer a written notice of intention to remove him or her from office. The violation, practice, or breach must be one involving personal dishonesty on the part of such director or officer, or one which demonstrates a willful or continuing disregard for the safety or soundness of the credit union. The written notice shall serve to suspend the officer or director from office. Such suspension shall become effective upon service of such notice and, unless stayed by a court in proceedings authorized by subsection (6) of this section, shall remain in effect pending the completion of the administrative proceedings under subsection (5) of this section and until such time as the commissioner shall dismiss the charges specified in such notice or, if an order of removal is issued against the officer or director, the effective date of any such order. (5) A notice of intention to remove an officer or director from office shall contain a statement of the facts constituting grounds therefor, and shall fix a time and place at which a hearing will be held thereon. Such hearing shall be fixed for a date not earlier than thirty (30) days nor later than sixty (60) days after the date of service of such notice, unless an earlier date is set by the commissioner at the request of such officer or director and for good cause shown. Unless such officer or director shall appear at the hearing in person or by duly authorized representative, he or she shall be deemed to have consented to the issuance of an order of removal. In the event of such consent, or if upon the record made at any such hearing the commissioner shall find that any of the grounds specified in such notice have been established, the commissioner may issue such orders of suspension or removal from office as he or she deems appropriate. (6) Within ten (10) days after an officer or director has been suspended from office, such officer or director may apply to the Circuit Court of the residence of the individual or of the principal office of the credit union for a stay of such suspension pending the completion of the administrative proceedings pursuant to the notice served upon such officer or director, and such court shall have jurisdiction to grant such stay. (7) Any person aggrieved by a final order of the commissioner under subsection (5) of this section may obtain a review of the order by filing in the Circuit Court of the residence of the individual or of the principal office of the credit union a petition of appeal within ten (10) days after the rendition of a final order. A copy of the petition shall be served upon the commissioner and thereupon the commissioner or the commissioner's agent shall certify and file in court a copy of the record or other evidence upon which the order is entered. No objection to the order may be considered by the court unless it was argued before the commissioner or there were reasonable grounds for failure to do so. (8) The commissioner may apply to the Circuit Court of the residence of the individual or of the principal office of the credit union for an injunction to enforce any order under subsection (5) of this section and it shall be the duty of the court to issue such injunction. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 731, effective July 15, 2010. -- Amended 1988 Ky. Acts ch. 195, sec. 3, effective July 15, 1988. -- Created 1984 Ky. Acts ch. 408, sec. 30, effective July 13, 1984. Formerly codified as KRS 290.296. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-305 Special meetings of members

286.6-305. Special meetings of members The supervisory committee by a majority vote may call a special meeting of the members to consider any violation of this subtitle, the credit union's charter or bylaws, or any practice of the credit union deemed by the supervisory committee to be unsafe or unauthorized. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 31, effective July 13, 1984. Formerly codified as KRS 290.305. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-315 Capital of credit union

286.6-315. Capital of credit union (1) The capital of a credit union consists of the aggregate amount of the share and deposit accounts of its members plus all reserves and undivided earnings. (2) Shares may be subscribed to, paid for and transferred in such manner as the bylaws prescribe. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 32, effective July 13, 1984. Formerly codified as KRS 290.315. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-320 "Credit card guaranty" defined -- Requirement to insure validity

286.6-320. "Credit card guaranty" defined -- Requirement to insure validity (1) As used in this section, "credit card guaranty" means an agreement pursuant to which a natural person assumes liability for indebtedness to a credit union incurred by use of a credit card without receiving the contractual right to obtain extensions of credit under the account for which the credit card is issued. (2) No credit card guaranty shall be valid or enforceable unless it is in writing signed by the guarantor and contains a provision specifying the amount of the maximum aggregate liability of the guarantor thereunder. Effective: July 15, 1988 History: Created 1988 Ky. Acts ch. 236, sec. 3, effective July 15, 1988. Formerly codified as KRS 290.320. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-325 Dividends -- Approval of commissioner required prior to payment

286.6-325. Dividends -- Approval of commissioner required prior to payment (1) At such intervals and for such periods as the board of directors may authorize, and after provision for the required reserves, the board of directors may declare dividends to be paid on shares and share certificates from net earnings. Prior approval of the commissioner shall be required for the payment of dividends in excess of net earnings, except that if the excess is less than one percent (1%) of undivided earnings prior approval shall not be required. (2) Dividends may be paid at various rates, or not paid at all, with due regard to the conditions that pertain to each class of share. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 732, effective July 15, 2010. -- Amended 1988 Ky. Acts ch. 195, sec. 4, effective July 15, 1988. -- Created 1984 Ky. Acts ch. 408, sec. 33, effective July 13, 1984. Formerly codified as KRS 290.325. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-335 Deposits

286.6-335. Deposits A credit union may offer deposits and deposit certificates to its members and other credit unions, subject to such terms, rates, and conditions as the board of directors establishes and any regulations the commissioner may prescribe. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 733, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 34, effective July 13, 1984. Formerly codified as KRS 290.335. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-345 Special purpose accounts

286.6-345. Special purpose accounts Christmas clubs and vacation clubs may be operated under conditions established by the board of directors, and other special purpose share and deposit accounts may be operated with authorization from the commissioner. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 734, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 35, effective July 13, 1984. Formerly codified as KRS 290.345. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-355 Withdrawal of assets by member

286.6-355. Withdrawal of assets by member (1) Shares, share certificates, deposits, and deposit certificates may be withdrawn for payment to the account holder or to third parties, in such manner and in accordance with such procedures as may be established by the board of directors, subject to approval by the commissioner. The board may restrict one (1) class of share so it may not be redeemed, withdrawn, or transferred except upon termination of membership in the credit union. (2) Shares, share certificates, deposits, and deposit certificates shall be subject to any withdrawal notice requirement which may be imposed pursuant to the bylaws. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 735, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 36, effective July 13, 1984. Formerly codified as KRS 290.355. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-365 Minors' accounts

286.6-365. Minors' accounts Shares, share certificates, and deposit certificates may be issued to and deposits received from a person under eighteen (18) years of age who may withdraw the shares and deposits, including the dividends and interest thereon. Deposits and share payments made by a person under eighteen (18) years of age and withdrawals thereof by such a person shall be valid in all respects. For such purposes a person under eighteen (18) years of age is deemed of full age. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 37, effective July 13, 1984. Formerly codified as KRS 290.365. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-375 Joint accounts

286.6-375. Joint accounts (1) A member may designate any person or persons to own shares, share certificates, deposits and deposit certificates with him in joint tenancy with the right of survivorship, as a tenant in common or under any other form of joint ownership permitted by law; but no co-owner, unless a member in his own right, shall be permitted to vote, obtain loans, or hold office or be required to pay an entrance or membership fee. (2) Payment of part or all of such accounts to any of the co-owners shall, to the extent of such payment, discharge the liability to all unless the account agreement contains a different provision. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 38, effective July 13, 1984. Formerly codified as KRS 290.375. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-385 Trust accounts

286.6-385. Trust accounts (1) Shares, share certificates, deposits, and deposit certificates may be held in the name of a member in trust for a beneficiary, or in the name of a nonmember in trust for a beneficiary who is a member. (2) Beneficiaries may be under eighteen (18) years of age; but no beneficiary, unless a member in his own right, shall be permitted to vote, obtain loans, hold office or be required to pay an entrance or membership fee. (3) Payment of part or all of such a trust account to the party in whose name the account is held shall, to the extent of such payment, discharge the liability of the credit union to that party and to the beneficiary, and the credit union shall be under no obligation to see to the application of such payment. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 39, effective July 13, 1984. Formerly codified as KRS 290.385. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-395 Lien of credit union

286.6-395. Lien of credit union The credit union shall have a lien on the shares, share certificates, deposits, deposit certificates and accumulated dividends or interest of a member in his individual, joint or trust account, for any sum past due the credit union from said member or for any loan endorsed by him. The credit union shall also have a right of immediate setoff with respect to every such account. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 40, effective July 13, 1984. Formerly codified as KRS 290.395. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-405 Credit union insurance on shares and deposits

286.6-405. Credit union insurance on shares and deposits (1) Not later than December 31, 1984, a credit union shall apply for insurance on shares and deposits as provided by the national credit union administration under Title II of the Federal Credit Union Act (12 U.S.C. secs. 1781 et seq.), or alternatively, a form of comparable insurance approved by the commissioner. This requirement does not apply to a credit union with debt and equity capital consisting primarily of funds from other credit unions. (2) A credit union which has been denied a commitment for such insurance shall within thirty (30) days commence steps to either liquidate, or merge with an insured credit union, or apply in writing to the commissioner for additional time to obtain an insurance commitment. The commissioner may grant one (1) or more extensions of time to obtain the insurance commitment upon satisfactory evidence that the credit union has made or is making substantial effort to achieve the conditions precedent to issuance of the commitment. (3) No credit union shall be granted a charter by the commissioner unless such credit union has obtained a commitment for insurance of its member share and deposit accounts. (4) The commissioner may make available reports of condition and examination findings to the National Credit Union Administration or to any qualified insuring organization and may accept any report of examination made on behalf of such agency or organizations. The commissioner may appoint an official of the National Credit Union Administration or of any qualified insuring organization as liquidating agent of an insured credit union. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 736, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 41, effective July 13, 1984. Formerly codified as KRS 290.405. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-415 Reduction in shares

286.6-415. Reduction in shares (1) Whenever the losses of any credit union, resulting from a depreciation in value of its loans or investments or otherwise, exceed its undivided earnings and reserve fund so that the estimated value of its assets is less than the total amount due the shareholders, the credit union may by a majority vote of those voting on the proposition order a reduction in the shares of each of its shareholders to divide the loss proportionately among the members. (2) If the credit union thereafter realizes from such assets a greater amount than was fixed by the order of reduction, such excess shall be divided proportionately among the shareholders whose assets were reduced, but only to the extent of such reduction. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 42, effective July 13, 1984. Formerly codified as KRS 290.415. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-425 Purposes of loans -- Conditions of loans

286.6-425. Purposes of loans -- Conditions of loans A credit union may loan to members for such purposes and upon such conditions as the bylaws may provide. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 43, effective July 13, 1984. Formerly codified as KRS 290.425. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-435 Interest rate

286.6-435. Interest rate The interest rates on loans shall be determined by the board of directors, not to exceed two percent (2%) per month on unpaid balances. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 44, effective July 13, 1984. Formerly codified as KRS 290.435. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-445 Charges for failure to meet obligations

286.6-445. Charges for failure to meet obligations A credit union may assess charges to members, in accordance with the bylaws, for failure to meet their obligations to the credit union in a timely manner. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 45, effective July 13, 1984. Formerly codified as KRS 290.445. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-450 Expulsion and withdrawal of members

286.6-450. Expulsion and withdrawal of members (1) At any regularly called meeting, the members, by a two-thirds (2/3) vote of those present, may expel any member for cause and after hearing. A member may withdraw from a credit union by filing a written notice of such intention. (2) All amounts paid in on shares of an expelled or withdrawing member, with any dividends credited to his shares to the date of expulsion or withdrawal, shall be paid to such member in the order of expulsion or withdrawal and only as funds therefor become available, after deducting any amounts due to the corporation by such member. Such member, when withdrawing shares or deposits, shall have no further right in the credit union or to any of its benefits but such expulsion or withdrawal shall not operate to relieve him from any remaining liability to the corporation. Effective: October 1, 1942 History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883g-24. Formerly codified as KRS 290.270 and 290.450. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-455 Application form

286.6-455. Application form Every application for a loan shall be made in writing upon a form, which the credit committee, credit manager, or loan officer prescribes. The application shall state the purpose for which the loan is desired, and the security, if any, offered. Each loan shall be evidenced by a written document. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 46, effective July 13, 1984. Formerly codified as KRS 290.455. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-465 Maximum loan

286.6-465. Maximum loan No loan shall be made to any member in an aggregate amount in excess of ten percent (10%) of the credit union's capital. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 47, effective July 13, 1984. Formerly codified as KRS 290.465. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-475 Security

286.6-475. Security Security within the meaning of this subtitle may include, without limitation because of enumeration, the endorsement of a note by a surety, comaker or guarantor; assignment of an interest in real or personal property; or assignment of shares or wages. The adequacy of any security shall be determined by the credit committee, credit manager, or loan officer, as appropriate under the bylaws. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 48, effective July 13, 1984. Formerly codified as KRS 290.475. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-485 Installments

286.6-485. Installments A member may receive a loan in installments, or in one (1) sum, and may pay the whole or any part of his loan on any day on which the office of the credit union is open for business. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 49, effective July 13, 1984. Formerly codified as KRS 290.485. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-495 Line of credit

286.6-495. Line of credit Upon written application by a member, the credit committee or credit manager may approve a self-replenishing line of credit, and loan advances may be granted to the member within the limit of such line of credit. Where a line of credit has been approved, no additional loan application is required as long as the aggregate indebtedness does not exceed the approved limit. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 50, effective July 13, 1984. Formerly codified as KRS 290.495. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-505 First mortgage loans

286.6-505. First mortgage loans Loans secured by first mortgages on real estate shall not exceed fifty percent (50%) of the credit union's unimpaired capital, unless the commissioner shall otherwise determine by regulation or by order in any special case. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 51, effective July 13, 1984. Formerly codified as KRS 290.505. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-515 Other loan programs

286.6-515. Other loan programs (1) A credit union may participate in any guaranteed loan program of the federal or state government under the terms and conditions specified in the law under which such a program is provided. (2) A credit union may purchase the conditional sales contracts, notes and similar instruments of its members. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 52, effective July 13, 1984. Formerly codified as KRS 290.515. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-525 Loans to credit union officials

286.6-525. Loans to credit union officials (1) A credit union may make loans to its officers, directors, employees, loan officers, credit manager, and to members of its supervisory and credit committees, provided that: (a) The loan complies with all lawful requirements under this subtitle with respect to loans to other borrowers and is not on terms more favorable than those extended to other borrowers; and (b) Any loan or aggregate of loans to any official which exceeds twenty-five thousand dollars ($25,000) plus pledged shares shall be approved by the board of directors. (2) A credit union may permit officers, directors, employees, loan officers, credit manager, and members of its supervisory and credit committees to act as comakers, guarantors or endorsers of loans to other members, except that when any such loan standing alone or when added to any outstanding loan or loans to the comaker, guarantor or endorser exceeds ten thousand dollars ($10,000), approval of the board of directors is required. Effective: July 14, 2000 History: Amended 2000 Ky. Acts ch. 157, sec. 8, effective July 14, 2000. -- Created 1984 Ky. Acts ch. 408, sec. 53, effective July 13, 1984. Formerly codified as KRS 290.525. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-535 Insurance for members

286.6-535. Insurance for members (1) A credit union may purchase or make available insurance for its members in amounts related to their respective ages, shares, deposits or loan balances or to any combination of them. (2) A credit union may enter into cooperative marketing arrangements to facilitate its members' voluntary purchase of insurance, limited to credit life, accident and health insurance. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 54, effective July 13, 1984. Formerly codified as KRS 290.535. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-545 Insurance for credit union officials

286.6-545. Insurance for credit union officials A credit union may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the credit union, or who is or was serving at the request of the credit union as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against the person and incurred by the person in his official capacity or arising out of the person's status as such, whether or not the credit union would have the power to indemnify the person against the liability. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 55, effective July 13, 1984. Formerly codified as KRS 290.545. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-555 Group purchasing

286.6-555. Group purchasing A credit union may enter into cooperative marketing arrangements to facilitate its members' voluntary purchase of such goods and services as are in the interest of improving economic and social conditions of the members. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 56, effective July 13, 1984. Formerly codified as KRS 290.555. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-565 Money transfers for convenience of members

286.6-565. Money transfers for convenience of members A credit union may collect, receive and disburse moneys in connection with the providing of negotiable checks, money orders, travelers' checks, and other money-type instruments, and for such other purposes as may provide benefit or convenience to its members, and charge a reasonable fee for such services. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 57, effective July 13, 1984. Formerly codified as KRS 290.565. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-575 Trustee or custodian

286.6-575. Trustee or custodian (1) A credit union may act as trustee or custodian of: (a) Individual retirement accounts authorized by federal or state law; (b) Pension funds of self-employed individuals or of a company or organization sponsoring the credit union; or (c) Other similar retirement or pension plans, with authorization from the commissioner. (2) A credit union may act as trustee under pension and profit-sharing plans with authorization from the commissioner. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 737, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 58, effective July 13, 1984. Formerly codified as KRS 290.575. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-585 Investments

286.6-585. Investments Funds not used in loans to members may be invested: (1) In securities, obligations, or other instruments of or issued by or fully guaranteed as to principal and interest by the United States of America or any agency thereof or in any trust or trusts established for investing directly or collectively in the same; (2) In obligations of any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and the several territories organized by Congress, or any political subdivision thereof; (3) In certificates of deposit or passbook-type accounts issued by a state or national bank, mutual savings bank, or savings and loan association; (4) (a) In loans, not to exceed twenty-five percent (25%) of capital at the lending credit union, to; or (b) In shares or deposits, not to exceed twenty percent (20%) of the capital of the investing credit union, of other credit unions, central credit unions, corporate credit unions, or a central liquidity facility established under state or federal law; (5) In shares, stocks, loans, or other obligations of any organization, corporation, or association, provided the membership or ownership, as the case may be, of the organization, corporation, or association is primarily confined or restricted to credit unions, or organizations of credit unions, and provided further the purpose for which it is organized is to strengthen or advance the development of credit unions or credit union organizations; (6) In shares of a cooperative society organized under the laws of this state or of the laws of the United States in the total amount not exceeding ten percent (10%) of the shares, deposits, and surplus of the credit union; (7) In stocks and bonds of corporations organized in any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico and the several territories organized by Congress to an aggregate maximum of five percent (5%) of members' shares in stocks and an aggregate maximum of five percent (5%) of members' shares in bonds, provided that investments shall be limited to stocks or bonds which appear on a list approved by the commissioner and published quarterly or annually, the list to include not less than thirty (30) corporations. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 738, effective July 15, 2010. -- Amended 2000 Ky. Acts ch. 157, sec. 9, effective July 14, 2000. -- Amended 1988 Ky. Acts ch. 195, sec. 5, effective July 15, 1988. -- Created 1984 Ky. Acts ch. 408, sec. 59, effective July 13, 1984. Formerly codified as KRS 290.585. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-595 Reserves

286.6-595. Reserves A credit union shall, at the close of each accounting period, establish and maintain reserves at least equal to the reserve requirements of the National Credit Union Administration necessary to maintain deposit insurance. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 60, effective July 13, 1984. Formerly codified as KRS 290.595. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-605 Use of regular reserve

286.6-605. Use of regular reserve The regular reserve shall belong to the credit union and shall be used to meet losses resulting from loans and risk assets and to meet such other losses as are approved by the commissioner and shall not be distributed except on liquidation of the credit union, or in accordance with a plan approved by the commissioner. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 739, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 61, effective July 13, 1984. Formerly codified as KRS 290.605. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-615 Risk assets

286.6-615. Risk assets The commissioner shall define by regulation what is deemed "risk assets" for the purpose of establishing the regular reserve. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 740, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 62, effective July 13, 1984. Formerly codified as KRS 290.615. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-625 Special reserves

286.6-625. Special reserves In addition to such regular reserve, special reserves to protect the interest of members shall be established when required by regulation, or when found by the board of directors of the credit union or by the commissioner, in any special case, to be necessary for that purpose. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 741, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 63, effective July 13, 1984. Formerly codified as KRS 290.625. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-635 Taxation of real and personal property

286.6-635. Taxation of real and personal property Any credit union organized under KRS 286.6-015 or any other provision of this subtitle and all shares and deposits therein shall be exempt from all taxation imposed by this state or any taxing authority within this state. No law which taxes corporations in any form, or the shares or deposits thereof, or the accumulation thereon, shall apply to any such credit union; except that any real property and any tangible personal property owned by any such credit union shall be subject to taxation to the same extent as other similar property is taxed, provided that this exception shall not permit the imposition of any sales or use taxes on the credit union. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 64, effective July 13, 1984. Formerly codified as KRS 290.635. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-645 Expenses not payable out of general fund of Kentucky

286.6-645. Expenses not payable out of general fund of Kentucky No expenses of a credit union operating in Kentucky shall be paid out of appropriations from the general fund. Effective: July 13, 1984 History: Created 1984 Ky. Acts ch. 408, sec. 68, effective July 13, 1984. Formerly codified as KRS 290.645. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-700 Suspension of credit union operations

286.6-700. Suspension of credit union operations (1) If it appears that any credit union is bankrupt or insolvent, or that it has willfully violated this subtitle, or is operating in an unsafe or unsound manner, the commissioner may 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 this subtitle, or both. The commissioner shall also notify any government agency or other organization insuring the accounts of the credit union of any suspension. (2) Upon receipt of such suspension notice, the credit union shall cease all operations, except those authorized by the commissioner. The board of directors shall then file with the commissioner a reply to the suspension notice, and may request a hearing to present a plan of corrective actions proposed if it desires to continue operations. The board may request that the credit union be declared insolvent and a liquidating agent be appointed. (3) Upon receipt from the suspended credit union of evidence that the conditions causing the order of suspension have been corrected, the commissioner may revoke the suspension notice, permit the credit union to resume normal operations, and notify any interested insuring agency of such action. (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, the commissioner may issue a notice of involuntary liquidation and appoint a liquidating agent. The credit union may request the appropriate court to stay execution of such action. Involuntary liquidation may not be ordered prior to the conclusion of suspension procedures outlined in this section. (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. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 742, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 202, sec. 1, effective July 13, 1984. Formerly codified as KRS 290.700. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-705 Voluntary liquidation -- Filing certificate of dissolution

286.6-705. Voluntary liquidation -- Filing certificate of dissolution (1) A credit union may elect to dissolve voluntarily and liquidate its affairs in the manner prescribed in this section. (2) The board of directors shall adopt a resolution recommending the credit union be dissolved voluntarily, and directing that the question of liquidation be submitted to the members. (3) Within ten (10) days after the board of directors decides to submit the question of liquidation to the members, the president shall notify the commissioner and any government agency or other organization insuring member accounts thereof in writing, setting forth the reasons for the proposed liquidation. Within ten (10) days after the members act on the question of liquidation, the president shall notify the commissioner and any government agency or other organization insuring member accounts in writing as to the action of the members on the proposal. (4) As soon as the board of directors decides to submit the question of liquidation to the members, payments on shares, share certificates, deposits, deposit certificates, withdrawal of shares, making any transfer of shares to loans and interest, making investments of any kind, and granting loans shall be suspended pending action by members on the proposal to liquidate. On approval by the members of such proposal, all such business transactions shall be permanently discontinued. Necessary expenses of operation shall, however, continue to be paid on authorization of the board of directors or liquidating agent during the period of liquidation. (5) For a credit union to enter voluntary liquidation, approval by a majority of the members in writing or by a two-thirds (2/3) majority of the members present at a regular or special meeting of the members is required. Where authorization for liquidation is to be obtained at a meeting of the members, notice in writing shall be given to each member, by first class mail, at least ten (10) days prior to such meeting. (6) A liquidating credit union shall continue in existence for the purpose of discharging its debts, collecting on loans and distributing its assets, and doing all acts required in order to wind up its business and may sue and be sued for the purpose of enforcing such debts and obligations until its affairs are fully concluded. (7) The board of directors or the liquidating agent shall use the assets of the credit union to pay: first, expenses incidental to liquidation including any surety bond that may be required; second, any liability due non-members; third, deposits and deposit certificates as provided in this subtitle. Assets then remaining shall be distributed to the members proportionately to the shares held by each member of the date dissolution was voted. (8) As soon as the board of directors or the liquidating agent determines that all assets from which there is a reasonable expectancy of realization have been liquidated and distributed as set forth in this section, they shall execute a certificate of dissolution on a form prescribed by the commissioner and file it, together with all pertinent books and records of the liquidating credit union, with the commissioner, whereupon such credit union shall be dissolved. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 743, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 202, sec. 2, effective July 13, 1984. Formerly codified as KRS 290.705. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-710 Merger of credit union

286.6-710. Merger of credit union (1) Any credit union may, with the approval of the commissioner, merge with another credit union under the existing charter 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, approved by the affirmative vote of a majority of the members of the merging credit union present at a meeting of its members duly called for such purpose, and consented to by any government agency or other organization insuring the accounts of the credit union. (2) The commissioner may approve a merger according to the plan agreed upon by the majority of the board of directors of each credit union if approved by less than a majority of the entire membership, as provided in this section, if the commissioner finds upon the written and verified application filed by the board of directors that: (a) Notice of the meeting called to consider the merger was mailed to each member entitled to vote upon the question; (b) Such notice disclosed the purpose of the meeting and properly informed the membership that approval of the merger might be sought pursuant to this section; and (c) A majority of the votes cast upon the question were in favor of the merger. (3) 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; and (e) The vote by which the plan was approved by the members. (4) Such certificate and a copy of the plan of merger agreed upon shall be forwarded to the commissioner, certified by him, and returned to both credit unions within thirty (30) days. (5) Upon return of the certificate from the commissioner, all property, property rights, and members' interest of the merged credit union shall vest in the surviving credit union without 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. (6) This section shall be construed, whenever possible, to permit a credit union organized under any other act to merge with one (1) incorporated under this subtitle, or to permit any credit union incorporated under this subtitle to merge with one (1) organized under any other act. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 744, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 202, sec. 3, effective July 13, 1984. Formerly codified as KRS 290.710. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code. .

KRS 286.6-715 Conversion of credit union

286.6-715. Conversion of credit union (1) A credit union incorporated under the laws of this state may be converted to a credit union organized under the laws of any other state or under the laws of the United States, subject to regulations issued by the commissioner. (2) A credit union organized under the laws of the United States or of any other state may convert to a credit union incorporated under the laws of this state. To effect such a conversion, a credit union must comply with all the requirements of the jurisdiction under which it was originally organized and the requirements of the commissioner and file proof of such compliance with said commissioner. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 745, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 202, sec. 4, effective July 13, 1984. Formerly codified as KRS 290.715. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286.

KRS 286.6-990 Penalties

286.6-990. Penalties (1) Any credit union that fails to make the report required by KRS 286.6-090, when notified, shall pay to the department ten dollars ($10) for each day of such failure, unless excused. (2) Any officer or any member of a committee who participates in the making of a loan to a nonmember shall be fined not less than ten dollars ($10) nor more than one hundred dollars ($100) or imprisoned for not less than thirty (30) days nor more than six (6) months, or both. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 746, effective July 15, 2010. -- Amended 1986 Ky. Acts ch. 193, sec. 3, effective July 15, 1986. -- Amended 1984 Ky. Acts ch. 408, sec. 67, effective July 13, 1984. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 883g-3, 883g-6, 883g-20. Formerly codified as KRS 290.990. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

KRS 286.6-991 Penalties

286.6-991. Penalties (1) Violation of KRS 286.6-045 constitutes a misdemeanor punishable by a fine of not more than five hundred dollars ($500), by imprisonment for not more than one (1) year, or both. (2) The commissioner may petition a court of competent jurisdiction to enjoin a violation of KRS 286.6-045. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 747, effective July 15, 2010. -- Created 1984 Ky. Acts ch. 408, sec. 65, effective July 13, 1984. Formerly codified as KRS 290.991. Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.

Source: Kentucky Legislative Research Commission (legislature.ky.gov)URL: https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38636Fetched: 10/20/2026