Md. Code, Financial Institutions, Title 6

in effect

Md. Code, Financial Institutions § 6-101

(a) In this title the following words have the meanings indicated. (b) “Board” means the board of directors of a credit union. (c) (1) “Branch” means a credit union office at which shares or deposits are received, share drafts or checks are paid, or money is lent. (2) “Branch” includes a mobile branch or other special–purpose facility that performs a function of a branch. (3) “Branch” does not include an automated teller machine as defined in § 1–401(d) of this article. (d) “Credit union” means a cooperative, nonprofit financial institution organized under this title to conduct business in the State. (e) “Credit union service organization” means an entity formed to engage in activities that: (1) Are incidental to the conduct of the business of a credit union; (2) Advance or facilitate the purposes of a credit union; and (3) Primarily serve a credit union and its members. (f) (1) “Credit union share guaranty corporation” means a corporation engaged in the business of guaranteeing or insuring payment of a credit union share or deposit account. (2) “Credit union share guaranty corporation” includes the Credit Union Insurance Corporation established under Title 7 of this article. (g) “Deposit account” means a balance held by a credit union on which a contractual rate of interest may be paid as a debt owed by the credit union to the depositor. (h) “Fixed assets” includes land, buildings, leasehold improvements, furniture, fixtures, and equipment used in the conduct of the regular business of a credit union. (i) “Member in good standing” means a member who: (1) Owns at least one share in a credit union; (2) Is current on all credit obligations to the credit union; and (3) Has not caused the credit union a credit or deposit loss that is currently outstanding. (j) “Officer” means any officer that a Maryland corporation is required or permitted to have under § 2–412 of the Corporations and Associations Article. (k) “Official” means: (1) A director; (2) A member of a credit committee; or (3) A member of a supervisory committee. (l) “Out–of–state credit union” means: (1) A federal credit union with its main office in a state other than this State; or (2) A credit union chartered and primarily regulated by another state. (m) “Share” or “share account” means a balance held by a credit union on which a dividend may be paid and which confers membership and voting rights on the member.

Md. Code, Financial Institutions § 6-201

Except as otherwise indicated in this title, Titles 3 through 5 of this article do not apply to credit unions.

Md. Code, Financial Institutions § 6-202

Credit unions are subject to the supervision of the Commissioner.

Md. Code, Financial Institutions § 6-203

A credit union incorporated under the laws of this State, including its income, net worth, and other funds are exempt from all taxes imposed by this State or by any of its political subdivisions to the same extent as federal credit unions are exempt.

Md. Code, Financial Institutions § 6-204

A credit union may exercise all the rights, privileges, and incidental powers necessary or appropriate to exercise its specific powers and to accomplish the purposes for which the credit union is organized.

Md. Code, Financial Institutions § 6-205

This title shall be construed liberally to effectuate its purpose.

Md. Code, Financial Institutions § 6-206

This title may be cited as the Maryland Credit Union Act.

Md. Code, Financial Institutions § 6-301

(a) In this section, “organization” includes any trade, profession, club, union, religious congregation, society, association, fraternal group, or cooperative. (b) Seven or more adult individuals, each of whom is a resident of this State, may act as incorporators to form a credit union under this subtitle with one of the following field of membership types: (1) Single common bond; (2) Multiple common bond; or (3) Community common bond. (c) (1) Except as otherwise provided in this subtitle, the following provisions shall govern the field of membership types. (2) A single common bond credit union may serve one group of individuals all of whom as a common bond: (i) Belong to the same recognized organization; (ii) Are employed by a single corporation or other person; (iii) Are employed by a single corporation or other person with at least a 10% ownership interest in or by another single corporation or person; (iv) Are employed by a single corporation or other person that is related to another person, such as by contract and possessing a strong dependency relationship; or (v) Are employed by or attend the same school. (3) A multiple common bond credit union may serve one or more groups of individuals, as described in paragraph (2) of this subsection, as long as: (i) Within each group all individuals have a common bond of organization or occupation; and (ii) Each group is within reasonable geographic proximity and has access to a branch of the credit union. (4) (i) Subject to the provisions of subparagraphs (ii) and (iii) of this paragraph and subsection (d) of this section, a community credit union may serve a group of individuals, all members of which, as a common bond, live, work, worship, or attend school within a single or two or more contiguous well-defined local communities, neighborhoods, rural districts, or counties. (ii) If the common bond is within a single well-defined local community, neighborhood, rural district, or county, the total population at the time of the formation of the credit union may not exceed 300,000. (iii) If the common bond is within two or more contiguous well-defined local communities, neighborhoods, rural districts, or counties, the total population at the time of the formation of the credit union may not exceed 200,000. (d) Notwithstanding the provisions of subsection (c)(4) of this section, any credit union, without regard to its field of membership type, may include in its field of membership, without regard to location, a community, neighborhood, rural district, or county if: (1) The Commissioner determines that the community, neighborhood, rural district, or county is: (i) An “investment area” as defined in 12 U.S.C. § 4702(16) of the Community Development Banking and Financial Institutions Act of 1994; and (ii) Underserved by other depository financial institutions based on data of the Commissioner, the federal credit union and banking regulatory agencies, or other data sources; and (2) The credit union establishes and maintains an office or branch in the community, neighborhood, rural district, or county at which credit union services are available within 2 years after the inclusion of the community, neighborhood, rural district, or county in the field of membership of the credit union. (e) (1) Except as provided in paragraph (2) of this subsection, only a group with fewer than 3,000 members, excluding individuals who are eligible under § 6-302(b)(4) or (5) of this subtitle, shall be eligible to be included in the membership of a multiple common bond credit union. (2) The numerical limitation in paragraph (1) of this subsection does not apply with respect to a group: (i) That the Commissioner determines could not feasibly or reasonably establish a new single common bond credit union; (ii) Transferred from another credit union in connection with: 1. A merger or consolidation approved by the Commissioner based on safety and soundness concerns; or 2. A liquidation approved by the Commissioner; or (iii) Transferred through the merger or consolidation of two credit unions, both of which served the group immediately before the merger or consolidation.

Md. Code, Financial Institutions § 6-302

(a) In this section, “immediate family relative” means: (1) A spouse; (2) A child; (3) A sibling; (4) A parent; (5) A grandparent; (6) A grandchild; (7) A stepparent; (8) A stepchild; (9) A step-sibling; or (10) Any adopted relative. (b) A member of a credit union may be: (1) An individual who shares with other members of the credit union one of the common bonds within the field of membership types approved by the Commissioner; (2) An employee of the credit union; (3) An entity that is composed primarily of individuals who are eligible for membership; (4) An individual living in the same residence and maintaining a single economic unit with an individual who is eligible for membership; and (5) An immediate family relative of an individual who is eligible for membership. (c) A person that is eligible for membership under subsection (b) of this section becomes a member when the person: (1) Subscribes to and pays for at least one share; and (2) Meets all of the other requirements of the bylaws of the credit union. (d) Once an individual who is eligible for membership under subsection (b)(4) or (5) of this section becomes a member, then an immediate family relative of the member is eligible to become a member. (e) A member remains a member of a credit union until the member: (1) Chooses to withdraw from the membership of the credit union; or (2) Is expelled by the board under § 6-319 of this subtitle.

Md. Code, Financial Institutions § 6-303

(a) (1) Subject to the provisions of § 6-301(c) and (e) of this subtitle, a multiple common bond credit union may add to its field of membership a group of over 750 potential members, excluding individuals who are eligible for membership under § 6-302(b)(4) or (5) of this subtitle, if: (i) The members have approved the necessary amendment to the bylaws, as required under § 6-320(a) of this subtitle; (ii) The credit union files with the Commissioner an application and any other documents that the Commissioner deems necessary to make a determination; and (iii) The Commissioner determines that: 1. The credit union has not engaged in any material unsafe or unsound practice during the 1-year period preceding the date of filing the application; 2. The credit union has adequate net worth; 3. The credit union has the administrative capability to serve the potential members of the group and the financial resources to meet the need for additional staff and assets to serve the potential members of the group; 4. Any potential harm that the expansion may have on any other credit union and its membership is clearly outweighed in the public interest by the probable beneficial effect of the expansion in meeting the convenience and needs of the potential members of the group; 5. Formation of a separate credit union by the group is not practicable and consistent with reasonable safety and soundness standards; and 6. The group is within reasonable geographic proximity to a branch of the credit union. (2) Unless the Commissioner notifies the credit union that a different time period is necessary, within 60 days after the application is filed, the Commissioner shall notify the credit union of the determination on the application. (b) Subject to the provisions of § 6-301(c) and (e) of this subtitle, a multiple common bond credit union may add to its field of membership a group of 750 or less potential members, excluding individuals who are eligible under § 6-302(b)(4) or (5) of this subtitle, if: (1) The board approves the addition of the group; (2) The credit union notifies the Commissioner in writing within 30 days after the board approves the addition of the group; (3) The requirements of subsection (a)(1)(iii) of this section are met; and (4) The addition of the group has not been disapproved by the Commissioner within 30 days of the notification required under item (2) of this subsection.

Md. Code, Financial Institutions § 6-304

(a) A credit union may convert to another field of membership type, as described in § 6–301 of this subtitle, if: (1) The credit union: (i) Meets the common bond requirements of the proposed field of membership type; and (ii) Files with the Commissioner an application and any other documents that the Commissioner deems necessary to make a determination on the application; and (2) The Commissioner determines that approval: (i) Is in the best interest of the existing and proposed memberships; (ii) Provides a means for better service to the existing membership; (iii) Is in accordance with sound credit union practices; and (iv) Does not expose the funds of the existing members to unnecessary risk. (b) Unless the Commissioner notifies the credit union that a different time period is necessary, within 120 days after the application is filed, the Commissioner shall notify the credit union of the determination on the application. (c) (1) No less than 30 days before the effective date of the conversion, the credit union shall give notice of the conversion to all groups of potential members of the credit union that will be removed from the field of membership as a result of the conversion. (2) On and after the effective date of the conversion, the credit union: (i) May not continue to serve groups within the field of membership of the credit union that no longer qualify for membership in the credit union as a result of the conversion; and (ii) May continue to serve members of a group identified under item (i) of this paragraph who are members before the effective date of the conversion.

Md. Code, Financial Institutions § 6-305

(a) The incorporators shall sign and acknowledge three copies of articles of incorporation. (b) The articles of incorporation shall include: (1) The name and residential address of each incorporator; (2) A statement that each incorporator is 18 years of age or older; (3) A statement that the incorporators are associating to form a credit union under this title; (4) The name of the credit union; (5) The field of membership type as described in § 6-301 of this subtitle; (6) The municipal area and county where the credit union is to be located; (7) The par value of the shares of the credit union; (8) The number of shares to which each incorporator subscribes; (9) The name and address in the State of the resident agent of the credit union for purposes of service of process in accordance with the Maryland General Corporation Law; and (10) The number of directors and the names and residential addresses of the individuals who will serve as directors on the board until their successors are elected and qualify.

Md. Code, Financial Institutions § 6-306

(a) The incorporators shall adopt bylaws for the credit union and shall sign and acknowledge two copies of them. (b) The bylaws of the credit union shall include: (1) The name and purpose of the credit union; (2) Provisions for annual and special meetings of members and the manner of notification for and conduct of the meetings; (3) The number of members that constitute a quorum and provisions that relate to voting; (4) A detailed description of the field of membership; (5) The qualifications for membership; (6) The number of directors on the board and their powers and duties; (7) The powers and duties of its credit committee, if any, and supervisory committee; (8) The powers and duties of its officers; (9) The number of and qualifications for directors emeriti, if any; (10) The par value of its shares and the conditions for issuance, payment, transfer, and withdrawal; (11) The conditions on which deposits may be received and withdrawn; and (12) Provisions for determining and paying dividends on shares and interest on deposits.

Md. Code, Financial Institutions § 6-307

(a) The incorporators shall: (1) File with the Commissioner for examination three copies of the articles of incorporation and two copies of the bylaws; and (2) Pay to the Commissioner a fee of $500. (b) The Commissioner shall investigate and determine if: (1) The articles and bylaws are framed in accordance with law and are reasonable; (2) The character, responsibility, and general fitness of the incorporators command confidence and warrant belief that the business of the proposed credit union will be conducted honestly and efficiently, in accordance with the intent of this title; and (3) Allowing the proposed credit union to engage in business: (i) Will promote public convenience and advantage; and (ii) Is expedient and desirable. (c) After the investigation, the Commissioner may require any change in the articles of incorporation or bylaws that the Commissioner considers necessary. (d) (1) Unless the Commissioner notifies the applicant that a different time period is necessary, within 120 days after the articles and bylaws are filed, the Commissioner shall sign, date, and endorse each copy of the articles and bylaws as “approved” or “refused”. (2) If formation of the credit union is refused, the Commissioner shall notify the incorporators in writing of the reason for the refusal. (3) If formation of the credit union is approved, the Commissioner shall: (i) Return to the incorporators two of the endorsed copies of the articles and one of the endorsed copies of the bylaws; and (ii) Keep one of the endorsed copies of the articles and the bylaws.

Md. Code, Financial Institutions § 6-308

(a) If the Commissioner approves the articles and bylaws, the incorporators shall file for record with the State Department of Assessments and Taxation one of the endorsed copies of the articles of incorporation. (b) When the articles of incorporation are filed for record in accordance with the provisions of subsection (a) of this section, the credit union becomes a corporation.

Md. Code, Financial Institutions § 6-309

(a) When filing the articles of incorporation and bylaws with the Commissioner under § 6-307 of this subtitle, the incorporators shall file with the Commissioner an initial application on a form that the Commissioner requires. (b) The initial application shall include: (1) The field of membership type requested; (2) A detailed description of the field of membership; (3) A mission statement; (4) A detailed business plan that includes the items that the Commissioner reasonably requires; and (5) Any other information that the Commissioner reasonably requires. (c) (1) In connection with an initial application and at any other time the Commissioner requests, each incorporator and director shall provide fingerprints for use by the Federal Bureau of Investigation and the Criminal Justice Information System Central Repository of the Department of Public Safety and Correctional Services to conduct criminal history records checks. (2) Any incorporator or director required by this subsection to provide fingerprints shall pay any processing or other fee required by the Federal Bureau of Investigation or the Criminal Justice Information System Central Repository of the Department of Public Safety and Correctional Services. (3) The fingerprinting and criminal history records check requirements shall apply to any other official or officer of the credit union as requested by the Commissioner.

Md. Code, Financial Institutions § 6-312

In addition to the powers set forth elsewhere in this title, a credit union may: (1) Receive the shares and deposits of its members; (2) Lend money to its members; (3) Invest funds as provided in this title; and (4) Undertake other activities that: (i) Are consistent with this title; (ii) Relate to its purposes; and (iii) Are authorized by its bylaws.

Md. Code, Financial Institutions § 6-313

(a) Notwithstanding any other provision of the laws or regulations of the State and subject to subsection (b) of this section, a credit union may engage in any additional activity, service, or other practice in which, under federal law or regulation, federal credit unions may engage, subject to the same conditions that federal law requires or allows as to federal credit unions. (b) (1) A credit union shall provide the Commissioner with written notice at least 45 calendar days before engaging in any activity, service, or other practice authorized under subsection (a) of this section. (2) The notice required under paragraph (1) of this subsection shall include a description of the proposed activity, service, or other practice, including: (i) The specific authority for the activity, service, or other practice; and (ii) Any condition that federal law requires or allows as to federal credit unions. (3) The credit union may begin to perform the activity, service, or other practice on the first business day after the 45th calendar day from the date the Commissioner receives the notice under paragraph (1) of this subsection unless the Commissioner: (i) Specifies a different date; or (ii) Prohibits the activity, service, or other practice. (c) The Commissioner may extend the 45–day period under subsection (b)(3) of this section if the Commissioner determines that the credit union’s notice requires additional information or additional time for analysis. (d) The Commissioner may prohibit a credit union from performing the activity, service, or other practice described in the notice provided under subsection (b) of this section if the Commissioner determines that performing the activity, service, or other practice would: (1) Adversely affect the safety and soundness of the credit union; (2) Be detrimental to the welfare of the general economy of the State; or (3) Be detrimental to the public interest or to credit unions.

Md. Code, Financial Institutions § 6-314

(a) Without being required to take any action to perfect a lien, a credit union has a lien and a right to a setoff on the shares and deposits of a member in any individual, multiple party, or other type of account, including any dividends or interest payable on those shares or deposits, to the extent of any delinquency or default of the member on: (1) Any outstanding loan, whether or not matured, on which the member is liable to the credit union as maker, comaker, surety, or endorser; and (2) Any dues, charges, fees, fines, or other amount payable by the member. (b) If a member resigns or is expelled, the credit union may cancel that member’s shares and apply their withdrawal value against any amount owed to the credit union by the member. (c) A credit union may allow a withdrawal of a member’s shares or deposits without affecting the credit union’s lien or right to a setoff. (d) A credit union may refuse to allow a withdrawal of a member’s shares or deposits to the extent of any delinquency or default of the member to the credit union.

Md. Code, Financial Institutions § 6-317

(a) (1) The annual meeting of the members shall be held as provided by the bylaws and at the time and place that the board determines. (2) Special meetings of members shall be held: (i) On order of the directors or the supervisory committee; or (ii) At the request of 10 percent of the members. (3) Notice of each meeting shall be given as the bylaws provide. (b) (1) Each member in good standing has one vote, notwithstanding the number of shares that the member holds. (2) A member may not vote by proxy. However, a member that is not an individual may be represented by an individual authorized in writing by the member to represent it. (3) A member may not vote or hold office if the member is less than 18 years of age. (c) (1) At any meeting of the members, the members may: (i) Decide any question of interest to the credit union; (ii) Except for any instance where, in the judgment of the board, it would result in damage to the credit union’s financial soundness or would otherwise force the board to abrogate their fiduciary responsibility, overrule any decision of the board; and (iii) Amend the bylaws or articles of incorporation as provided in § 6-320 of this subtitle. (2) At the annual meeting of the members, the members shall elect directors, unless they are elected as provided in § 6-329 of this subtitle or as provided in the bylaws for mail balloting.

Md. Code, Financial Institutions § 6-318

(a) The provisions of this section do not apply to: (1) An action authorized under § 6-329 or § 6-321 of this subtitle; (2) A voluntary dissolution under § 6-804 of this title; or (3) An authorization of compensation under § 6-331 of this subtitle. (b) The board of a credit union: (1) May authorize by resolution any question, proposal, or other matter requiring membership approval to be voted on by mail ballot; and (2) Shall establish a sequence of dates by which the voting procedures are initiated and completed. (c) The secretary of the credit union shall mail to each member in good standing who is eligible to vote: (1) A printed ballot; (2) An explanation of the question, proposal, or other matter to be voted on; and (3) A postage pre-paid and pre-addressed return envelope. (d) Unless otherwise provided in this title, the printed ballot shall be mailed to each member in good standing who is eligible to vote, not more than 30 days nor less than 7 days before the date set by the board for the filing of the mail ballot. (e) (1) The question, proposal, or other matter is adopted only if approved by a majority of the ballots timely received from the members eligible to vote and in good standing and voting. (2) The credit union shall report the results of the mail ballot to the members.

Md. Code, Financial Institutions § 6-319

(a) Subject to the applicable provisions of the bylaws, the board may expel any member of the credit union who: (1) Defaults on the payment of any monetary obligation to the credit union; (2) Is convicted of a criminal offense involving dishonesty or breach of trust; (3) Neglects or refuses to comply with the provisions of this title or of the bylaws of the credit union; (4) Habitually neglects to pay debts or becomes insolvent or bankrupt; or (5) Subject to the provisions of subsection (b) of this section, violates a written expulsion policy adopted by the board. (b) (1) The board shall post conspicuously at each office of the credit union a notice of any expulsion policy adopted by the board. (2) A person expelled by the board may request a reconsideration of the expulsion.

Md. Code, Financial Institutions § 6-320

(a) (1) The board may amend the articles of incorporation only if the members approve the amendment. (2) (i) Except as provided in subparagraph (ii) of this paragraph, the board may amend the bylaws without approval of the members. (ii) The board may amend the bylaws only with the approval of the members for any amendment that addresses one of the following subjects: 1. The manner or method by which a meeting of the members can be convened; 2. Quorum requirements for a meeting of the members; 3. The voting rights of members; 4. Except as provided in § 6-303(b) of this subtitle, any change in the field of membership; 5. Requirements for the number, classifications, qualifications, and term of office for directors; 6. Procedures for removing directors; 7. Procedures for filling vacancies on the board; and 8. Any other issue as determined by the Commissioner. (b) At any meeting of the members, the members may amend the articles of incorporation or, may approve an amendment to the bylaws as provided in subsection (a)(2)(ii) of this section, if: (1) The notice of the meeting specifies the amendment to be considered; and (2) Two-thirds of the members present vote for the amendment. (c) (1) An amendment to the articles of incorporation does not become effective until: (i) The amendment is approved by the Commissioner in writing no later than 60 days after the date of submission of the proposed amendment, unless the Commissioner and the credit union agree to a longer period of time; and (ii) A copy of the amendment certified by the Commissioner is filed with the State Department of Assessments and Taxation. (2) Whether approved only by the board or by the members as required under subsection (a)(2)(ii) of this section, an amendment to the bylaws does not become effective until the amendment is approved by the Commissioner in writing no later than 60 days after the date of submission of the proposed amendment, unless the Commissioner and the credit union agree to a longer period of time. (d) The action of the Commissioner on the proposed amendment to the articles of incorporation or the bylaws under subsection (c)(1)(i) or (2) of this section shall be based on a finding as to whether or not the proposed amendment: (1) Is in the best interest of the membership; (2) Provides means for better service to the membership; (3) Is in accord with sound credit union practices; and (4) Exposes the members’ funds to unnecessary risk. (e) The board shall report an amendment to the members of the credit union no later than the next meeting of the members after the Commissioner approves the amendment.

Md. Code, Financial Institutions § 6-321

(a) The board: (1) By resolution may authorize an amendment to the bylaws or articles of incorporation to be voted on by mail ballot; and (2) Shall establish a sequence of dates by which the voting procedures are initiated and completed. (b) The secretary of the credit union shall mail to each member in good standing: (1) A printed ballot; (2) A copy of any old bylaw or article of incorporation affected by the proposed amendment; and (3) A copy of the proposed bylaw or article of incorporation. (c) (1) The amendment is adopted only if approved by two-thirds of the mail ballots timely received from the members in good standing and voting. (2) The credit union shall report the results of the mail ballot to the credit union members.

Md. Code, Financial Institutions § 6-324

The board shall have the authority and responsibility for the business affairs, funds, and records of a credit union.

Md. Code, Financial Institutions § 6-325

(a) Each credit union shall have at least five directors. (b) Each director: (1) Shall be a member of the credit union; (2) Shall be bonded; (3) May not have: (i) Defaulted on the payment of any monetary obligation to the credit union; (ii) Been convicted of any criminal offense involving dishonesty or breach of trust; (iii) Habitually neglected to pay debts; (iv) Become insolvent or bankrupt; or (v) Been removed by any state or federal regulatory agency from office as an officer, official, or employee of a financial institution; and (4) Shall comply with any other qualifications set forth in the credit union bylaws. (c) A director holds office for the term that the bylaws provide, which may not exceed 3 years, and until a successor is elected and qualifies. (d) Each director shall take an oath that the director: (1) Will diligently and honestly perform the duties as director in administering the credit union’s affairs; (2) Will remain responsible for the performance of the duties of the director even if the director delegates the performance of the duties; and (3) Will not knowingly or willfully permit the violation of an applicable law or regulation. (e) The chairman and, if any, vice chairman of the board shall be elected by and from the directors.

Md. Code, Financial Institutions § 6-326

(a) The office of a director becomes vacant if the director: (1) Dies; (2) Resigns; or (3) Is removed. (b) A director may be removed from office: (1) By the board, in accordance with the bylaws, if the director: (i) Does not possess or maintain the qualifications required to serve on the board; or (ii) Is absent from three consecutive regular meetings of the board unless excused; or (2) By the members. (c) (1) Unless the bylaws provide otherwise, the remaining directors by majority vote shall fill a vacancy. (2) A director elected by the board to fill a vacancy holds office as the bylaws provide.

Md. Code, Financial Institutions § 6-327

(a) If the bylaws provide, a director emeritus may advise and consult with the board and aid the board in carrying out the board’s duties and responsibilities. (b) The bylaws shall provide for: (1) The number of directors emeriti; and (2) The qualifications for a director emeritus. (c) A director emeritus: (1) Shall be a member of the credit union; and (2) May not be an officer or an official. (d) A director emeritus may not: (1) Participate in any board or committee deliberations; (2) Make motions; or (3) Vote on any matter before the board.

Md. Code, Financial Institutions § 6-328

(a) In addition to any power or duty provided for by law, the board shall: (1) Act on each application for membership; (2) Approve the amount of any blanket fidelity bond and any appropriate insurance or surety bond; (3) Limit the number of shares or deposits that a member or depositor may hold; (4) Limit the amount that the credit union may lend to any one member and establish the interest rate on all loans; (5) Determine the interest rate on deposits and the manner of calculation; (6) In the absence of a credit committee, appoint one or more loan officers and delegate to those officers the power to approve or disapprove loans and lines of credit in accordance with written policies established by the board; (7) In the absence of a credit committee and upon written request of a member, review a loan application denied by a loan officer or establish a subcommittee of the board for this purpose; (8) Fill any vacancy on the supervisory committee or, if any, a credit committee; (9) Manage the investment of credit union funds in accordance with written investment policies established by the board; (10) Set the amount of compensation for the president; (11) Appoint standing or special committees, as necessary, to carry on the business of the credit union and prescribe conditions and limitations for any committee that the board appoints; (12) Approve an annual operating budget for the credit union; (13) Establish and adopt written policies necessary to implement the powers and duties of the credit union, including policies on: (i) Loans and lending; (ii) Investments; (iii) Employment and personnel; (iv) Funds management; (v) Collections; (vi) Charge offs; and (vii) Expulsion of members; (14) Make adequate provision for: (i) Investment losses; (ii) The statutory reserve account; (iii) Any special reserve account; and (iv) The allowance for a loan and lease loss account; (15) Determine the amount, if any, that may be assessed for late fees or other charges; (16) Delegate to the officers, employees, or committees duties as the board may deem appropriate; (17) Establish and maintain a system of internal controls consistent with safety and soundness and generally accepted accounting principles; and (18) Except for any instance where, in the judgment of the board, it would result in damage to the credit union’s financial soundness or would otherwise force the board to abrogate their fiduciary responsibility, perform every other duty that the members require. (b) (1) Subject to the provisions of paragraphs (2) and (3) of this subsection, the board may suspend a member of the supervisory committee. (2) The suspension: (i) Shall be by a two-thirds vote of the board; and (ii) Takes effect immediately and remains in effect until the board convenes a meeting of the members to vote on the suspension. (3) Immediately after the board votes to suspend a member of the supervisory committee, the board shall: (i) Call a meeting of the members, to be held no later than 15 days after the date of the suspension, for the purpose of voting on the suspension; and (ii) Notify the Commissioner in writing about the suspension.

Md. Code, Financial Institutions § 6-329

(a) Subject to the provisions of this section, the directors may be elected exclusively by mail ballot or electronically in accordance with regulations adopted by the Commissioner, if: (1) The board of the credit union, by resolution posted conspicuously at the principal office of the credit union at least 90 days before the annual meeting of the members of the credit union, authorizes the election of directors exclusively by mail ballot or electronically; or (2) (i) The bylaws provide for the election of directors exclusively by mail ballot or electronically; and (ii) Notice of the election and the annual meeting is posted conspicuously at the principal office of the credit union at least 90 days before the date of the annual meeting. (b) (1) At least 75 days before the annual meeting, the board of the credit union shall appoint a nominating committee of at least three members. (2) The nominating committee shall nominate at least one member for each vacancy on the board, after determining that a proposed nominee agrees to permit the nomination and, if elected, to accept the office. (3) The nominating committee shall file its nominations with the secretary of the credit union at least 60 days before the annual meeting. (4) The secretary shall post these nominations conspicuously at the principal office of the credit union at least 55 days before the annual meeting. (c) (1) (i) The lesser of 1 percent or 500 of the members in good standing, but in any case no less than 20, may nominate candidates for directorships by signing a petition. (ii) Each page of the petition shall include: 1. The name of the credit union; and 2. The name of the nominee. (iii) Each petition shall contain: 1. The printed or typed names, signatures, date, and account numbers of those members in good standing signing the petition; and 2. A certificate by each nominee that the nominee agrees to permit the nomination and, if elected, to accept the office. (iv) The nominating committee shall determine the validity of any petition. (2) Petitioners shall file their nomination with the secretary of the credit union at least 55 days before the annual meeting. (3) The secretary shall post these nominations conspicuously at the principal office of the credit union at least 20 days before the annual meeting. (d) (1) When only one member is nominated for a position to be filled, the chairman may: (i) Take a voice vote; or (ii) Declare the nominee elected by general consent or acclamation at the annual meeting. (2) If the nominations of the nominating committee and any petitioners provide more than one nominee for each directorship to be filled, the secretary: (i) For an election of directors conducted by mail ballot, shall mail to each member in good standing, at least 20 days before the annual meeting: 1. A printed ballot, clearly identified as a ballot, on which appears the name of each nominee, in alphabetical order, and on which, in the form that the board approves, may appear after a nominee’s name: A. A brief statement of the nominee’s qualifications and biographical information; and B. If applicable, a notation that the nominee is the incumbent; 2. A postage prepaid and preaddressed envelope clearly marked with instructions to place the completed ballot and the identification form in the envelope and seal the envelope; and 3. An identification form to be completed to include the name, address, signature, and credit union account number of the voter; and (ii) For an election of directors conducted electronically, shall provide the information and identification form required under item (i) of this paragraph as provided in regulations adopted by the Commissioner. (3) One form may be printed or provided electronically that represents a combined ballot and identification form. (e) The board shall appoint the tellers of the election. (f) The tellers of an election may not count a ballot unless it is: (1) Mailed or electronically submitted to the tellers; and (2) Received by the tellers not later than midnight of the 7th day before the date of the annual meeting. (g) The tellers of the election shall: (1) Verify or cause to be verified the name of each voter and the credit union account number of the voter as it appears on the identification form; (2) Authenticate any questionable or challenged identification form; (3) Keep the verified identification form and ballot for safekeeping pending the count of the vote; (4) Keep separate any questionable or challenged identification form and ballot until the authentication, verification, or challenge is resolved; (5) Determine that each eligible voter does not vote more than once and is a member in good standing; and (6) After the time set in subsection (f)(2) of this section, tally the votes and report the results to the board. (h) The board shall report the results of the election at the annual meeting of the members. (i) The Commissioner shall establish by regulation procedures for conducting an election of directors electronically, including procedures for: (1) Providing notice of the election to each member in good standing; (2) Providing the information and identification form specified in subsection (d)(2)(i)1 of this section; (3) Providing instructions on how to access and use the electronic election system; and (4) Allowing a member to opt out of using the electronic election system and vote by mail ballot.

Md. Code, Financial Institutions § 6-330

(a) Within 15 days after the annual meeting of the members and after the directors-elect have qualified, the board shall meet and elect the officers of the credit union. (b) Unless the bylaws provide otherwise: (1) Each officer serves for a term of 1 year and until a successor is elected and qualifies; and (2) The president shall be the chief executive officer who shall be responsible for the day to day operations of the credit union. (c) Subject to the provisions of an enforceable employment contract, if any, the board may remove an officer at any time.

Md. Code, Financial Institutions § 6-331

(a) In this section, “compensation” means anything of value given to an official that is: (1) In exchange for services performed as an official; and (2) Reportable as income to the Internal Revenue Service or the Comptroller of the State. (b) Each official is entitled to the compensation that: (1) Subject to the provisions of subsection (c) of this section, the members authorize; and (2) Except as provided in subsection (d)(2) of this section, is approved by the Commissioner. (c) (1) All compensation to be paid under subsection (b) of this section shall be authorized by a vote of the members at the annual meeting of the membership in accordance with § 6–317 of this subtitle. (2) Written disclosure of the proposed compensation and each official’s expenses shall be made to all members in good standing not less than 30 days and not more than 90 days before the annual meeting of members. (3) The written disclosure required under paragraph (2) of this subsection shall contain at least the following information: (i) The proposed dollar amount of compensation that will be paid to each official on a per meeting or other applicable basis; (ii) The aggregate dollar amount of compensation paid to all officials for the 12 months immediately preceding the date of the notice of the annual meeting of members; (iii) 1. A reasonable estimate of the aggregate dollar amount of compensation to be paid to all officials for the following 12–month period assuming: A. That the proposed compensation is approved; and B. The same number of meetings as were held during the 12 months immediately preceding the date of the notice of the annual meeting of members; or 2. A statement that the compensation to be paid to all officials will remain the same as it was during the 12 months immediately preceding the date of the notice of the annual meeting of members; and (iv) The aggregate dollar amount of all officials’ expenses, excluding compensation, for the 12 months immediately preceding the date of the notice of the annual meeting of members. (4) (i) The written disclosure shall be conspicuously set apart from other information provided to the members. (ii) The written disclosure may be included in: 1. The notice of the annual meeting of the members; 2. A separate mailing; 3. A periodic statement of account; or 4. A periodic publication of the credit union. (d) (1) All requests for the Commissioner’s approval under subsection (b) of this section shall: (i) Be made in writing; and (ii) Contain a certification by the president of the credit union that the compensation has been authorized by the membership in accordance with subsection (c) of this section. (2) The Commissioner’s approval is not required if the credit union: (i) Was rated “1” or “2” as of the last examination conducted by the Commissioner; and (ii) Has a positive net income as of the end of the previous calendar year.

Md. Code, Financial Institutions § 6-332

(a) A board may call a special meeting of the members to act on a report or recommendation of the supervisory committee that concerns the suspension from office of a member of the credit committee, a director, or an officer. (b) The notice of the special meeting shall be given within 7 days after the board receives the report or recommendation.

Md. Code, Financial Institutions § 6-333

(a) The board shall prepare a plan for educating each official as to the duties and responsibilities that accompany the official’s position. (b) The education plan may include requiring an official to: (1) Read materials; (2) Attend seminars, conferences, or workshops; or (3) Review films or tapes. (c) The preparation of and compliance with an education plan developed under this section may not be construed to limit the civil or criminal liability of an official arising from an act or omission by the official in the performance of any duty or responsibility of the official.

Md. Code, Financial Institutions § 6-401

(a) Each credit union shall have a supervisory committee. (b) The board shall appoint the members of the supervisory committee at: (1) The first meeting of the board following the annual meeting of the members; and (2) Any time there is a vacancy. (c) (1) Subject to the provisions of paragraph (2) of this subsection, the board shall determine the number of members on the supervisory committee. (2) The supervisory committee shall have at least three and not more than seven members. (d) (1) Each member of the supervisory committee shall be appointed from among the members of the credit union. (2) Not more than one member of the supervisory committee may be a director. (3) An officer of the credit union, a member of the credit committee, or an employee of the credit union may not be a member of the supervisory committee. (4) At least one member of the supervisory committee shall have experience in: (i) Accounting; (ii) Auditing; or (iii) General business. (5) Each member of the supervisory committee: (i) Shall be bonded; (ii) May not have been convicted of any criminal offense involving dishonesty or breach of trust; (iii) May not have habitually neglected to pay any debts; (iv) May not become insolvent or bankrupt while serving on the supervisory committee; and (v) May not have been removed by the Commissioner or any state or federal regulatory agency as an officer, official, or employee of a financial institution. (e) The members of the supervisory committee shall elect the chairman of the supervisory committee: (1) At the beginning of each term of appointment to the committee; and (2) At any time there is a vacancy and the board is notified. (f) A member of the supervisory committee serves for 1 year and until a successor is appointed and qualifies. (g) Each member of the supervisory committee shall take an oath to perform faithfully the duties of the office. (h) (1) The board shall appropriate funds: (i) For an audit conducted by an outside auditor; and (ii) If required, for an internal auditing function. (2) The supervisory committee has the sole authority to engage or terminate outside and internal auditors.

Md. Code, Financial Institutions § 6-402

(a) The supervisory committee is responsible for ensuring that the officials and officers: (1) Meet required financial reporting objectives; and (2) Establish practices and procedures sufficient to safeguard members’ assets. (b) To meet its responsibilities, the supervisory committee shall determine whether: (1) Internal controls are: (i) Established and effectively maintained to achieve the credit union’s financial reporting objectives; and (ii) Sufficient to satisfy the requirements of the supervisory committee audit, verification of members’ accounts, and the supervisory committee’s additional responsibilities; (2) The credit union’s accounting records and financial reports are promptly prepared and accurately reflect operations and results; (3) The relevant plans, policies, and control procedures established by the board are properly administered; and (4) The board’s plans, policies, and control procedures are sufficient to safeguard against error, carelessness, conflict of interest, self-dealing, and fraud. (c) (1) The supervisory committee shall submit: (i) A report on the annual audit to the board; and (ii) A summary of the report on the annual audit to the members at the annual meeting of the members. (2) The supervisory committee shall conduct or cause to be conducted and shall submit to the board, supplementary audits as the supervisory committee deems necessary. (3) The supervisory committee shall submit written reports periodically to the board addressing activities since the last report. (d) (1) The supervisory committee audit of a credit union shall occur at least once each calendar year and shall cover the period elapsed since the last audit period. (2) The supervisory committee annual audit shall meet the following minimum guidelines: (i) A credit union with assets over $250,000,000 shall have an opinion audit of the credit union’s financial statements performed by an independent licensed certified public accountant; and (ii) A credit union with assets of less than $250,000,000 may satisfy the audit requirements by: 1. An opinion audit of the credit union’s financial statements performed by an independent licensed certified public accountant; 2. In accordance with the provisions of paragraph (3) of this subsection, an agreed upon procedures engagement performed by a qualified person with appropriate knowledge of auditing concepts and credit union procedures; or 3. An audit performed by the supervisory committee or the credit union’s internal auditors. (3) The following minimum procedures shall be satisfied under paragraphs (2)(ii)2 and (2)(ii)3 of this subsection: (i) Determine that the reserve fund is sufficient in accordance with § 6-703 of this title; (ii) Determine that the credit union meets minimum net worth requirements in accordance with § 6-702 of this title; (iii) Review and test the bank statement reconciliations by testing for mathematical accuracy and ensuring that reconciling items are reasonable and clear promptly; (iv) Perform an unannounced cash count at some time during the period covered by the audit and ensure that the amount of cash counted agrees to the general ledger; (v) Review a sufficient number of current and delinquent loans to determine whether or not they are in accordance with the credit union’s underwriting policies and procedures as established by the board; (vi) Determine that the trial balance listing of loans agrees with the general ledger; (vii) Determine that the allowance for the loan and lease loss account meets the minimum standards required under § 6-704 of this title; (viii) Determine that all loans that are delinquent 60 days or more are reported to the board monthly; (ix) Determine that the investment subsidiary or list of investments agrees with the general ledger by performing the following procedures: 1. Compare the balance of investments and accrued interest receivable from the subsidiary ledger to the general ledger; 2. Choose a sample of investments and compare the market value per the subsidiary ledger to an outside source; 3. Test the accrued interest and compare it to the subsidiary ledger; 4. Test a sample of investment purchases or sales during the audit period for proper authorization to make sure that the accounting treatment is correct, compare the terms of the transactions to a broker advice, and make sure that the investment is in accordance with board policy; and 5. Confirm all investments with any depository institution, broker, or third party safekeeping agent, or inspect the original certificate, if it is in the possession of the credit union; (x) Determine that the trial balance listing of shares and deposits agrees with the general ledger; (xi) Perform a minimum of 20 share and deposit dividend and interest calculations paid during the audit period; (xii) Obtain a list of all overdrawn share and deposit accounts and determine that management is attempting to collect these items; (xiii) Obtain a listing of other asset and other liability accounts, make a selection of five of these accounts including any suspense or clearing accounts, and perform the following procedures: 1. Obtain reconciliations of the selected accounts and compare the balance to the general ledger; 2. Test the mathematical accuracy of the reconciliation; and 3. Determine whether any reconciling items have been outstanding for more than 30 days; (xiv) Perform a minimum of 20 loan interest calculations collected during the audit period; (xv) Review the minutes of the board meetings to ensure that they document relevant decisions, including decisions about charged off loans, interest rate changes, policy changes, interest and dividend rates, personnel issues, and the annual budget; and (xvi) Other auditing procedures as are deemed necessary by the board, the Commissioner, or the supervisory committee. (e) (1) At least once every 2 years the supervisory committee or its designee shall verify the accounts of the members in accordance with paragraph (2) of this subsection. (2) The verification shall be performed using one of the following methods: (i) A 100% verification of the share and loan accounts of all members; (ii) A statistical sampling of member share and loan accounts done in connection with an opinion audit of the financial statements performed by a licensed certified public accountant; or (iii) A statistical sampling method that provides a random selection that is expected to be representative of the membership. (f) (1) A credit union with assets in excess of $250,000,000 shall have an internal audit function in accordance with paragraph (2) of this subsection. (2) The supervisory committee shall: (i) Hire one or more internal auditors to assist the supervisory committee in the performance of the audit duties of the supervisory committee; (ii) Adopt and execute an annual internal audit plan that adheres to board policies and includes: 1. An evaluation of internal controls; and 2. Operational procedures; and (iii) Direct the duties of the internal auditor. (g) Any agreement between the supervisory committee and an outside auditor shall be documented by an engagement letter that specifies the terms, conditions, and objectives of the arrangement. (h) (1) All work performed by the supervisory committee, outside auditors, or internal auditors shall be documented by appropriate work papers. (2) The Commissioner shall have access to the work papers for a period of up to 3 years after the completion of the audit procedure. (i) (1) At any time, by a unanimous vote, the supervisory committee may suspend a director, an officer, or a member of the credit committee for cause. (2) (i) Subject to the provisions of subparagraph (ii) of this paragraph, the suspension will take effect immediately and stay in force until the board convenes a special meeting of the members to act on the suspension. (ii) The meeting of the members shall take place no later than 15 days from the date of the vote to suspend, for the purpose of voting on the suspension. (3) The supervisory committee shall notify the Commissioner in writing immediately at the time of the suspension of the director, officer, or member of the credit committee. (j) The supervisory committee shall send promptly to the Commissioner a copy of the annual audit and all recommendations, charges, and significant findings that the supervisory committee presents to the board.

Md. Code, Financial Institutions § 6-403

(a) In this section, “examiner” means: (1) The Commissioner; and (2) An individual whom the Commissioner designates as examiner. (b) An examiner shall visit each credit union and examine its business: (1) At least once during each calendar year, unless the Commissioner determines that, during a calendar year, an examination is unnecessary, in which event an examination shall occur no less frequently than once every 18 months; (2) When requested by the board or supervisory committee of the credit union; and (3) At any other time that the Commissioner considers necessary.

Md. Code, Financial Institutions § 6-404

(a) On or before March 31 of each year, each credit union shall report to the Commissioner on the business of the credit union during the preceding calendar year. (b) The Commissioner may require any other reports from a credit union that the Commissioner considers necessary. (c) Each report made under this section shall be: (1) On the form that the Commissioner provides; and (2) Signed and acknowledged by: (i) A majority of the members of the supervisory committee; and (ii) The president, vice-president, secretary, or treasurer of the credit union. (d) If a credit union fails to make any report as required by this title, the credit union shall pay to the Commissioner $50 for each day that the report is overdue.

Md. Code, Financial Institutions § 6-405

(a) If the Commissioner finds that the supervisory committee of a credit union is not performing its duties properly, the Commissioner may require the credit union to have a certified public accountant audit the credit union for any period of time that the Commissioner considers necessary. (b) The audit required under subsection (a) of this section shall be made at the expense of the credit union.

Md. Code, Financial Institutions § 6-406

(a) The board may call a meeting of the members of the credit union to act on any practice of the credit union that the supervisory committee considers unsafe or unauthorized. (b) The board shall give the Commissioner advance notice of a meeting of the members that is called under subsection (a) of this section.

Md. Code, Financial Institutions § 6-407

In order to carry out the purposes of this title, the Commissioner may enter into cooperative and information sharing agreements with any other credit union supervisory agency.

Md. Code, Financial Institutions § 6-501

As to each interest bearing or share account of each member or depositor in a credit union, the credit union shall generally make available to any member or depositor with an existing account, in addition to actually giving to the member or depositor, on the opening of the interest bearing or share account and, later, on demand of the member or depositor the following written notice: “Under Maryland law, all funds remaining in this interest bearing or share account become the property of this State after the account has been inactive for 3 years and notice is sent to the member or depositor at that member’s or depositor’s last known address. This account will be considered inactive if the member or depositor has not: (1) increased or decreased the amount in the account; (2) presented the passbook or other similar evidence of the account for the crediting of interest or dividends; (3) written to this credit union about the account; (4) engaged in any credit, share, or other deposit transaction with the credit union; or (5) otherwise indicated an interest in the account as evidenced by a memorandum on file with this credit union.”

Md. Code, Financial Institutions § 6-502

(a) (1) Except as otherwise provided in this section, the board may declare and pay dividends from its available net earnings or undivided earnings at the close of any accounting period after providing for accrued expenses and interest. (2) Dividends paid or accrued are to be treated as an expense. (b) The board shall set the dividend rate and any terms and conditions regarding the dividend. (c) A credit union may not declare a dividend: (1) Unless the required amount of earnings has been credited to the reserve fund of the credit union; or (2) If the known losses at the close of a fiscal year would exceed the sum of the balances of the reserve fund, surplus, and undivided earnings after payment of the dividend.

Md. Code, Financial Institutions § 6-503

(a) Any share drafts or checks provided directly or indirectly by a credit union for use in connection with a personal account shall have the numerical month and year in which the account was opened printed on the face of the drafts or checks, except as provided in subsection (b) of this section. (b) The provisions of subsection (a) of this section shall not apply under the following conditions: (1) If an individual personal account is closed at a particular credit union and a joint personal account is opened at the same credit union that includes one of the customers who previously had the individual personal account, then the numerical month and year printed on the face of the share drafts or checks shall be the numerical month and year in which the individual personal account was established. (2) If a joint personal account is closed at a particular credit union and an individual personal account is opened at the same credit union by one of the customers who previously was included under the joint account, then the numerical month and year printed on the face of the share drafts or checks shall be the numerical month and year in which the joint account was established. (3) If a customer with an individual personal account or with a joint personal account opens an additional account at the same credit union, then the numerical month and year printed on the face of the share drafts or checks shall be the numerical month and year in which the initial account was established. (4) In the case of a personal account that is closed and a new personal account opened simultaneously on the advice of the credit union, the share drafts or checks for the new account shall have the numerical month and year in which the closed account was originally opened printed on the face of the share drafts or checks. (5) If the closed account was opened prior to July 1, 1987, a date is not required to be printed on the share drafts or checks. (c) A share draft or check provided on the opening of a personal account for use by the customer until printed share drafts or checks have been prepared is not required to have the numerical month and year in which the account was opened printed on the face of the share draft or check. (d) (1) The credit union and the share draft or check printer may not be held liable for unintentional errors in the month and year printed on the face of the share draft or check. (2) The customer may not be charged for the reprinting of the share drafts or checks when the share drafts or checks are reprinted due to error in the month and year printed on the face of the share draft or check.

Md. Code, Financial Institutions § 6-601

(a) Subject to the provisions of this subtitle, a credit union may make loans and extend lines of credit to its members in accordance with written policies established by the board. (b) Notwithstanding subsection (e) of this section, § 6-606(d) of this subtitle, and § 12-913.1 of the Commercial Law Article, on or after October 1, 1994, a revolving credit plan and extensions of credit under a revolving credit plan offered and extended by a credit union to a member are made under and are subject to Title 12, Subtitle 9 of the Commercial Law Article. (c) Notwithstanding subsection (e) of this section, § 6-606(d) of this subtitle, and § 12-1013.1 of the Commercial Law Article, on or after October 1, 1994, a closed end loan made by a credit union to a member is made under and is subject to Title 12, Subtitle 10 of the Commercial Law Article. (d) Except as provided in subsection (e) of this section and § 6-606(d) of this subtitle, and except as otherwise provided under the express terms of the agreement, note, or other evidence of an extension of credit or loan, the provisions of Title 12, Subtitle 1, 3, 4, 5, 6, 9, or 10 of the Commercial Law Article do not apply to an extension of credit or loan made by a credit union before October 1, 1994. (e) (1) This subsection does not apply to an extension of credit or loan made by a credit union on or after October 1, 1994. (2) Except as otherwise expressly provided in this title, a credit union may not charge interest on any loan to a member at a rate of more than 1.5% a month on the unpaid balance. (3) Notwithstanding the provisions of paragraph (1) of this subsection, a credit union may charge interest on a loan to a member made on or after July 1, 1982, at 2% a month on the unpaid balance provided, with respect to the loan, that: (i) If the loan is a renewal or refinancing of a loan made prior to July 1, 1982, the lender complies with § 12-116 of the Commercial Law Article; (ii) If the loan includes a provision for a rate of interest which may be adjusted by the lender during the term of the loan, the lender complies with § 12-118 of the Commercial Law Article; (iii) Upon the borrower’s default, if the loan is secured by personal property, the lender complies with § 12-115 of the Commercial Law Article concerning repossession and redemption of the goods securing the loan; (iv) If the loan is for the purchase of consumer goods, the loan contract complies with § 12-117 of the Commercial Law Article; and (v) The loan does not include a balloon payment, unless payment in full is due on demand or in 1 year or less. (f) Notwithstanding any provision of Title 12 of the Commercial Law Article, if the credit agreement provides, a credit union may make loans or extend credit to its members incorporating the same terms and conditions as a federal credit union is permitted under federal law and regulations relating to: (1) Over the limit fees for credit cards; and (2) Fees for ancillary and administrative services requested by the member, including: (i) Researching account records; (ii) Providing duplicate statements and other documents; and (iii) Expedited issuance of a duplicate or original credit card or device.

Md. Code, Financial Institutions § 6-602

(a) If the bylaws so provide, a credit union may have a credit committee. (b) The board shall appoint the members of the credit committee. (c) (1) Subject to the provisions of paragraph (2) of this subsection, the board shall determine the number of members on the credit committee. (2) The credit committee shall have at least three and not more than seven members. (d) (1) Each member of the credit committee shall be appointed from among the members of the credit union. (2) Not more than one member of the credit committee may be a director. (3) The treasurer of the credit union may not be a member of the credit committee. (e) (1) At least one member of the credit committee shall have a minimum of 3 years experience in lending, credit, or general business. (2) Each member of the credit committee: (i) Shall be a member of the credit union for the period of time required under the bylaws; (ii) Shall be bonded; (iii) May not have defaulted on the payment of any monetary obligation to the credit union; (iv) May not have been convicted of any criminal offense involving dishonesty or breach of trust; (v) May not have habitually neglected to pay any debts; (vi) May not have been insolvent or bankrupt within 5 years of becoming a member and may not become insolvent or bankrupt while serving as a member; and (vii) May not have been removed by the Commissioner or any state or federal regulatory agency as an officer, official, or employee of a financial institution. (f) A member of the credit committee serves for 1 year and until a successor is appointed and qualifies. (g) The credit committee shall fill any vacancy on the committee by appointing an individual to serve until the next regular meeting of the board. (h) The members of the credit committee shall elect the chairman of the credit committee at the beginning of each term and at any other time that a vacancy may occur in the position of the chairman. (i) The board shall remove any member of the credit committee who fails: (1) To attend three consecutive regular meetings of the credit committee without good cause; or (2) To perform any of the duties of the office. (j) Each member of the credit committee shall take an oath to perform faithfully the duties of the office.

Md. Code, Financial Institutions § 6-603

(a) (1) Except as provided in subsection (b) of this section, and in § 6-328 (7) and (8) of this title, a loan may not be made to any member of a credit union unless it is approved unanimously by those members of the credit committee who are present at a meeting that is attended by a majority of the members of the credit committee. (2) If the bylaws of the credit union so provide, an applicant for a loan that is not approved by the credit committee may appeal to the board of directors. (b) (1) (i) The credit committee or the president may appoint loan officers. (ii) The appointment of loan officers by the president shall be subject to confirmation by the credit committee. (iii) The credit committee shall supervise loan officers and delegate to them the power to approve or disapprove loans in accordance with written instructions or policies adopted by the board. (2) Not more than one loan officer may be a member of the credit committee. (3) A loan made by a loan officer in accordance with the written instructions or policies of the board does not have to be approved by the credit committee. (4) (i) Each loan officer shall give the credit committee the record of each loan that the officer approves or disapproves within 7 days after a loan application is made. (ii) The credit committee shall act on each loan application where the decision of the loan officer has been appealed by the credit union member. (5) A loan officer may not disburse credit union funds for any loan that the loan officer approved. (c) The credit committee shall meet as often as necessary.

Md. Code, Financial Institutions § 6-604

The total of all loans made by a credit union directly or indirectly to any one member may not exceed 10 percent of the total assets of the credit union.

Md. Code, Financial Institutions § 6-605

(a) A credit union may make a loan, including a business loan, to a member with or without security in accordance with the written lending policies established by the board that cover all secured and unsecured loans. (b) A credit union may accept as security for a loan: (1) An endorsed note; (2) A note secured by a lien on real, leasehold, or personal property; (3) An assignment of shares or deposits in the credit union; or (4) Any other kind of security that is approved by the Commissioner. (c) The Commissioner may review the lending policies of the credit union and order changes.

Md. Code, Financial Institutions § 6-606

(a) Subject to § 6–606.1 of this subtitle, a credit union may make a loan to a member that is secured by real or leasehold property in accordance with written real estate lending policies established by the board as provided in this section. (b) A loan under this section shall be: (1) Secured by a deed of trust or mortgage on real or leasehold property; and (2) Amortized over a period of 30 years or less. (c) The Commissioner may review the lending policies of the credit union and order changes. (d) (1) This subsection does not apply to an extension of credit or loan made by a credit union on or after October 1, 1994. (2) A loan under this section that is secured by a first mortgage may be made at any rate of interest that does not exceed the rate authorized by Title 12, Subtitle 1 of the Commercial Law Article for mortgage loans. (3) A loan under this section that is secured by a second mortgage may be made at any rate of interest that does not exceed the rate authorized by Title 12, Subtitle 4 of the Commercial Law Article.

Md. Code, Financial Institutions § 6-606.1

§6–606.1. (a) (1) In this section the following words have the meanings indicated. (2) “Conventional home mortgage loan” has the meaning stated in § 11–501 of this article. (3) “Dwelling” has the meaning stated in § 11–501 of this article. (4) “Shared appreciation agreement” has the meaning stated in § 11–501 of this article. (b) (1) This subsection applies only to a conventional home mortgage loan that is not already required by law or regulation by the State or federal government to be assumable in connection with the granting of absolute divorce. (2) A credit union shall include in any conventional home mortgage loan a provision authorizing any of the existing borrowers to purchase the property interest of another borrower on the loan by assuming the seller’s portion of the mortgage if: (i) The assumption is in connection with the granting of a decree of absolute divorce; and (ii) The credit union determines that the assuming borrower qualifies for the loan. (c) A credit union shall disclose an assumption provision in any conventional home mortgage loan in writing to a loan applicant before the completion of the loan application.

Md. Code, Financial Institutions § 6-607

(a) Subject to the provisions of subsection (b) of this section, a credit union may participate with a depository financial institution or a credit union service organization for purposes of making a loan to a credit union member in accordance with the lending policies of the board. (b) A credit union may participate in a loan under subsection (a) of this section provided that the credit union that originates the loan retains an interest of at least 10% of the face amount of the loan.

Md. Code, Financial Institutions § 6-608

A credit union may make a loan that is insured or guaranteed by the federal government, a state government or local government, or a unit of the federal government or of any state or local government.

Md. Code, Financial Institutions § 6-609

(a) (1) In this section the following words have the meanings indicated. (2) “Eligible obligation” means a loan or a group of loans made to a member of a credit union by a lender other than the credit union to which the member belongs. (3) “Student loan” means a loan that is: (i) Granted to finance the borrower’s attendance at an institution of higher education or at a vocational school; and (ii) Secured by, and on which payment of the outstanding principal and interest has been deferred in accordance with, the insurance or guarantee of the federal government, a state government, or a unit of the federal government or of a state government. (b) (1) Subject to the provisions of paragraph (2) of this subsection, a credit union may purchase, in whole or in part, in accordance with the board’s purchase policies: (i) Eligible obligations of its members; (ii) Eligible obligations of the individual members of a liquidating credit union, from the liquidating credit union; (iii) Student loans if the credit union is granting student loans on an ongoing basis and if the purchase will facilitate the credit union’s packaging of a pool of the loans to be sold or pledged on the secondary market; and (iv) Real estate loans if the credit union is granting real estate loans under this subtitle on an ongoing basis and if the purchase will facilitate the credit union’s packaging of a pool of the loans to be sold or pledged on the secondary mortgage market. (2) A credit union may make a purchase under paragraph (1) of this subsection if: (i) The board or investment committee approves the purchase; (ii) A written agreement and a schedule of the eligible obligations covered by the agreement are retained by the credit union for inspection; (iii) The aggregate of the unpaid balance of eligible obligations purchased under paragraph (1)(i) and (ii) of this subsection does not exceed 5% of the total assets of the credit union; and (iv) For purchases of real estate loans under paragraph (1)(iv) of this subsection, the pool of loans to be sold or pledged on the secondary mortgage market: 1. Includes a substantial portion of the credit union’s members’ real estate loans, but no less than 20% of the aggregate principal amount of the loans purchased; and 2. Is sold promptly, but no later than 6 months after the purchase. (c) A credit union may sell or pledge, in whole or in part, the eligible obligations or loans purchased under subsection (b)(1) of this section if: (1) The board or investment committee approves the sale or pledge; and (2) The written agreement covering the sale or pledge and a schedule of the eligible obligations or loans covered by the agreement are retained by the credit union for inspection. (d) A credit union may agree to service any eligible obligation the credit union purchases or sells in whole or in part.

Md. Code, Financial Institutions § 6-610

(a) (1) A credit union may make a loan to an official of the credit union if the official takes no part in consideration of the loan application. (2) A loan authorized under paragraph (1) of this subsection requires approval of the board if: (i) The official is the debtor in the loan or is the guarantor, endorser, or cosigner of the loan; and (ii) The loan, standing alone or when added to the aggregate of all outstanding loans for which the official is the debtor or acts as guarantor, endorser, or cosigner, or both, exceeds $25,000 plus pledged shares. (b) The rates, terms, and conditions on any loan from a credit union to, or guaranteed, endorsed, or cosigned by, an official or officer of the credit union may not be more favorable than the rates, terms, and conditions for a comparable loan to another member of the credit union.

Md. Code, Financial Institutions § 6-611

A credit union may not make a loan to any person except: (1) A member of the credit union; (2) Another credit union; or (3) A credit union service organization.

Md. Code, Financial Institutions § 6-701

(a) Each credit union incorporated under the laws of this State shall: (1) Participate in and have its member accounts insured under the National Credit Union Administration Share Insurance Program; or (2) Participate in and have its member accounts insured by a credit union share guaranty corporation that is approved by the Commissioner to at least the same extent and amount as provided by the National Credit Union Administration Share Insurance Program. (b) (1) The Commissioner may examine any credit union share guaranty corporation that insures the member accounts of a credit union that is subject to this title. (2) The Commissioner may charge the reasonable cost of an examination conducted under paragraph (1) of this subsection to the credit union share guaranty corporation that is examined. (c) A credit union share guaranty corporation, its members, and persons who have share and deposit accounts in credit unions are not subject to the provisions of the Insurance Article as a result of any of the activities of the credit union share guaranty corporation under this title. (d) A credit union may not voluntarily terminate its insurance with the National Credit Union Administration Share Insurance Program or a credit union share guaranty corporation without prior approval of the Commissioner.

Md. Code, Financial Institutions § 6-702

A credit union is subject to the provisions of 12 C.F.R., Part 702 (Prompt Corrective Action) and 12 U.S.C. § 1790d (Net Worth Provisions).

Md. Code, Financial Institutions § 6-703

(a) In this section, “risk assets” means a credit union’s total loans outstanding to its members. (b) (1) Each credit union shall have a reserve fund to meet losses on loans and to meet other contingencies that the Commissioner specifies. (2) The reserve fund may be distributed to the members of the credit union only on dissolution of the credit union. (c) (1) After paying organization expenses, each credit union shall credit to its reserve fund all entrance fees, transfer fees, and fines. (2) A credit union in operation for 4 years or more and having assets of $500,000 or more shall credit to the reserve fund, at the end of each accounting period: (i) 10 percent of its gross income until the reserve fund equals 4 percent of its risk assets; and (ii) Then, 5 percent of its gross income until the reserve fund equals 6 percent of its risk assets. (3) A credit union in operation for less than 4 years or having assets of less than $500,000 shall credit to the reserve fund, at the end of each accounting period: (i) 10 percent of its gross income until the reserve fund equals 7.5 percent of its risk assets; and (ii) Then, 5 percent of its gross income until the reserve fund equals 10 percent of its risk assets. (4) On recommendation of the board, the amount credited to the reserve fund may be increased. (d) If the reserve fund falls below the amounts required by subsection (c)(2) or (3) of this section, it shall be restored by regular contributions.

Md. Code, Financial Institutions § 6-704

(a) A credit union shall maintain an allowance for loan and lease loss account in accordance with generally accepted accounting principles. (b) The balance of the allowance for loan and lease loss account shall include coverage for: (1) Individually classified loans; and (2) The historical reserve needs of the credit union.

Md. Code, Financial Institutions § 6-705

(a) The assets of a credit union that are not committed for loans may be invested in: (1) General obligations of or obligations guaranteed by the United States; (2) Deposits, loans, shares, or stock of any federal reserve bank, federal home loan bank, or any central liquidity facility established under state or federal law; (3) Securities, obligations, or other instruments of or issued by or fully guaranteed as to principal and interest by the federal government or a unit of the federal government; (4) General obligations of a state or a federal territory or political subdivision, provided that the general obligation is rated in one of the three highest rating categories of a nationally recognized statistical rating organization as determined by the Commissioner; (5) Deposits or federal funds of any financial institution that has federal deposit insurance; (6) Shares or deposits of other credit unions; (7) Mutual funds that invest solely in investments permissible for direct investment by the credit union; (8) Repurchase transactions secured by investments permissible for direct investment by the credit union; or (9) Any other investment that the Commissioner approves. (b) (1) Subject to the provisions of paragraph (2) of this subsection, in addition to the investments authorized under subsection (a) of this section, a credit union may request authority from the Commissioner to make other investments, including investments authorized under the federal Credit Union Act or regulations of the National Credit Union Administration, on an ongoing basis. (2) To obtain the Commissioner’s approval for additional investment authority under paragraph (1) of this subsection, a credit union shall submit to the Commissioner an investment policy. (c) The Commissioner may review the investment policies of the credit union and order changes.

Md. Code, Financial Institutions § 6-706

(a) (1) With the prior approval of the Commissioner, as required under subsection (b) of this section, a credit union may organize a credit union service organization. (2) A credit union that proposes to organize a credit union service organization shall: (i) File with the Commissioner a notice of intention to organize a credit union service organization; and (ii) Submit to the Commissioner any information the Commissioner requires in order to evaluate the proposed credit union service organization. (3) In deciding whether to approve the organization of a credit union service organization, the Commissioner shall consider whether: (i) The organization of the credit union service organization will promote the convenience of the members of the credit union; (ii) The credit union has sufficient net worth to support the credit union service organization; and (iii) The credit union generally is operating in compliance with the provisions of this title. (4) Unless the Commissioner notifies the credit union that a different time period is necessary, within 60 days of receipt of the notice specified in paragraph (2) of this subsection, the Commissioner shall notify the credit union of the determination on the approval of the organization of a credit union service organization. (b) (1) Subject to the provisions of this subsection, a credit union may invest in and make loans to a credit union service organization. (2) If an investment or loan by a credit union to a credit union service organization causes the aggregate of the credit union’s investments or loans to exceed 2% of the credit union’s total assets, the credit union shall: (i) Notify the Commissioner as provided in paragraph (3) of this subsection; and (ii) Receive the prior approval of the Commissioner for any investment in or loan to the credit union service organization that exceeds the limit imposed under this paragraph. (3) A credit union that proposes to make any investment in or loan to the credit union service organization that exceeds the limit under paragraph (2) of this subsection shall: (i) File with the Commissioner a notice of intention to exceed the limit; and (ii) Submit to the Commissioner any information the Commissioner requires in order to evaluate the proposed intention to exceed the limit. (4) In deciding whether to approve the investment or loan, the Commissioner shall consider whether: (i) The investment or loan will promote the convenience of the members of the credit union; (ii) The credit union has sufficient net worth to support the investment or loan; and (iii) The credit union generally is operating in compliance with the provisions of this title. (5) Unless the Commissioner notifies the credit union that a different time period is necessary, within 60 days of receipt of the notice specified in paragraph (2) of this subsection, the Commissioner shall notify the credit union of the determination on the approval of the investment or loan. (c) As deemed necessary by the Commissioner, the Commissioner shall have complete: (1) Access to the books and records of a credit union service organization; and (2) Authority to review the internal controls of a credit union service organization. (d) A credit union service organization may serve on a contractual basis more than one credit union and its members.

Md. Code, Financial Institutions § 6-707

(a) (1) In addition to any other investment authorized under this subtitle, a credit union may purchase, construct, or acquire and hold, either individually or jointly with another credit union, fixed assets for the purpose of providing adequate facilities for the transaction of present and future business. (2) A credit union may use fixed assets acquired under this section for: (i) The principal office functions; (ii) Branches; and (iii) Any other activities in which the credit union engages. (3) A credit union may rent excess space in a fixed asset acquired under this section as a source of income. (4) A credit union’s investment in fixed assets acquired under this section: (i) May exceed 4% of the total assets of the credit union only with the prior approval of the Commissioner; and (ii) May not exceed 6% of the total assets of the credit union. (b) A credit union may purchase, lease, or acquire and hold tangible personal property, either individually or jointly with another credit union, as may be necessary or incidental to the operations of the credit union.

Md. Code, Financial Institutions § 6-708

(a) (1) Subject to the provisions of paragraph (2) of this subsection, a credit union may borrow money for the purchase of fixed assets. (2) The term of the loan may not exceed: (i) 15 years for borrowings secured by real or leasehold property; and (ii) 5 years for borrowings secured by other fixed assets. (b) A credit union may borrow money for a purpose other than the purchase of fixed assets as long as the total borrowing does not exceed the greater of: (1) Two times the net worth of the borrowing credit union; or (2) 10% of the total assets of the borrowing credit union.

Md. Code, Financial Institutions § 6-709

A credit union may change its place of business on written notice to the Commissioner.

Md. Code, Financial Institutions § 6-710

The fiscal year of each credit union ends at the close of business on December 31.

Md. Code, Financial Institutions § 6-711

(a) A credit union shall post its hours of operation prominently in its office. (b) Each credit union shall be open for business during its posted hours, except that a credit union may close: (1) On any State holiday; and (2) At any other time if: (i) Notice of the closing is posted prominently in its office 3 business days in advance; (ii) Specifically authorized to close by the Commissioner; or (iii) An emergency exists that affects the credit union and it is not practical to obtain authorization from the Commissioner before closing the affected credit union. (c) If a credit union closes under the provisions of subsection (b)(2)(iii) of this section, the chairman of the board or the president of the affected credit union shall notify the Commissioner of the reason for the closing of the credit union as soon as possible but no later than 24 hours after the closing of the credit union.

Md. Code, Financial Institutions § 6-712

(a) (1) In this section the following words have the meanings indicated. (2) “De novo branch” means a branch of a credit union that was originally established by the credit union in the State. (3) “Deposit growth cap” means the year–over–year percentage change of total shares and deposits reported December 31 each year by federally insured credit unions to the National Credit Union Administration and published in the National Credit Union Administration Call Report Aggregate Financial Performance Reports. (4) “Deposits” means deposits originated and housed at a credit union branch located in a low– to moderate–income tract as reported by a credit union to the Commissioner each year as of June 30. (5) “Low– to moderate–income tract” has the meaning stated in § 5–203 of this article. (b) This section applies only to a credit union with assets of $300,000 or greater. (c) (1) The Commissioner shall impose an annual assessment on each credit union as provided in this subsection to cover the expense of regulating credit unions. (2) The Commissioner shall assess each credit union the sum of: (i) $1,000; and (ii) 8 cents for each $1,000 of the assets of the credit union over $1,000,000. (3) The assessment shall be based on assets stated in the credit union’s most recent financial report. (4) A well–capitalized credit union with a composite CAMELS rating of 1 or 2 may file with the Commissioner a request for an assessment offset credit of: (i) 12 cents for each $1,000 of deposits in a de novo branch located in a low– to moderate–income tract for the first 5 years after the date the de novo branch opened; or (ii) 6 cents for each $1,000 of deposits in a branch located in a low– to moderate–income tract not to exceed the deposit growth cap. (d) A credit union shall pay the assessment imposed under this section to the Commissioner on or before the March 1 after the assessment is imposed. (e) The Commissioner may designate a successor index for the deposit growth cap if the National Credit Union Administration Call Report Aggregate Financial Performance Reports is no longer published.

Md. Code, Financial Institutions § 6-713

If a credit union files an application with the Maryland Insurance Commissioner to purchase or make available, as an agent or otherwise, insurance for its members either on an individual or group basis, the credit union shall notify the Commissioner, within 10 days after filing the application, that the credit union has filed the application.

Md. Code, Financial Institutions § 6-714

(a) As approved by the Commissioner, a credit union may enter into marketing arrangements with a person to facilitate the credit union’s members’ voluntary purchase of goods or other services from third parties, consistent with the purposes of the credit union. (b) A credit union may be compensated for the services provided under subsection (a) of this section.

Md. Code, Financial Institutions § 6-715

(a) A credit union shall keep the books and records that the Commissioner requires to determine compliance with this title. (b) Unless a longer period is expressly required by State or federal law, a credit union shall retain the books and records required under subsection (a) of this section for a period of at least 5 years. (c) A credit union may retain the books and records required under subsection (a) of this section at any location, provided that the credit union: (1) Notifies the Commissioner in writing of the location of the books and records; and (2) Makes the books and records available at the credit union’s principal place of business, as agreed by the Commissioner and the credit union, within 7 days of a written request for examination by the Commissioner. (d) A credit union shall retain the books and records required under subsection (a) of this section in one of the following ways: (1) Original form; (2) An electronic equivalent approved by the Commissioner; or (3) A microphotographic copy approved by the Commissioner.

Md. Code, Financial Institutions § 6-801

(a) Any State credit union may convert into a federal credit union as provided by federal law and as provided in this section. (b) A majority of the board of a credit union proposing to convert shall: (1) Adopt a resolution that declares that the conversion is advisable; (2) Set a date for a vote on the proposed conversion by the members of the credit union at an annual or special meeting of the members or by mail ballot to be filed on or before that date; (3) Comply with federal law regarding conversion; and (4) File the required conversion application with the Commissioner. (c) The Commissioner, at the request of the board, may: (1) Waive the vote of the members; and (2) Substitute any reasonable method of determining the approval by the members. (d) Unless the Commissioner takes action under subsection (c) of this section, written notice of the proposed conversion and of the date set for the vote shall be delivered in person to each member or mailed to each member at the member’s address as recorded by the credit union, not more than 30 days nor less than 7 days before the date set for the vote. (e) (1) Unless the Commissioner takes action under subsection (c) of this section, the proposed conversion shall be approved by the affirmative vote of a majority of the members who vote on the proposal. (2) Within 10 days after the vote, a statement of the results of the vote shall be filed with the Commissioner. The statement shall be verified by the chairman or vice chairman of the board and by the secretary of the credit union. (f) (1) Within 90 days after a proposed conversion is approved by the members, the credit union shall take any action necessary under federal law to make it a federal credit union. (2) Within 10 days after the credit union receives a federal credit union charter, a copy of that charter shall be filed with the Commissioner and, when the copy is filed, the credit union ceases to be a State credit union. (g) When the conversion from a State credit union to a federal credit union is complete: (1) The converted credit union is no longer subject to the provisions of this title; and (2) The successor federal credit union owns all the assets and is responsible for all the obligations of the former State credit union as though the conversion had not taken place.

Md. Code, Financial Institutions § 6-802

(a) Any credit union organized under the laws of any other state or of the United States may convert to a State credit union as provided in this section. (b) A credit union proposing to convert shall meet: (1) All of the requirements of this title for the incorporation of a credit union in this State; and (2) All of the requirements of the Commissioner, including any specific conditions that a credit union must meet in order to convert. (c) A majority of the board of a credit union proposing to convert shall: (1) Adopt a resolution that declares that the conversion is advisable; and (2) Set a date for a vote on the proposed conversion by the members at an annual or special meeting of the members or by mail ballot to be filed on or before that date. (d) The Commissioner, at the request of the board, may: (1) Waive the vote of the members; and (2) Substitute any reasonable method of determining the approval by the members. (e) Unless the Commissioner takes action under subsection (d) of this section, written notice of the proposed conversion and of the date set for the vote shall be delivered in person to each member or mailed to each member at the member’s address as recorded by the credit union, not more than 30 days nor less than 7 days before the date set for the vote. (f) (1) Unless the Commissioner takes action under subsection (d) of this section, the proposed conversion shall be approved by the affirmative vote of a majority of the members who vote on the proposal. (2) Within 10 days after the vote, a statement of the results of the vote shall be filed with the Commissioner. The statement shall be verified by the chairman or vice chairman of the board and the secretary of the credit union. (g) (1) A credit union may convert to a State credit union if: (i) The converted credit union: 1. Meets the common bond requirements of the proposed field of membership type; and 2. Files with the Commissioner an application and any other documents that the Commissioner deems necessary to make a determination; and (ii) The Commissioner determines that the conversion: 1. Is in the best interest of the existing and proposed membership; 2. Will likely result in better service to the existing membership; 3. Is in accordance with sound credit union practices; and 4. Does not expose the funds of the existing members to unnecessary risk. (2) Unless the Commissioner notifies the credit union that a different time period is necessary, within 120 days after the application is filed, the Commissioner shall notify the credit union of the determination on the application. (h) When the conversion is complete, the successor credit union owns all of the assets and is responsible for all the obligations of the credit union as though the conversion had not taken place.

Md. Code, Financial Institutions § 6-803

(a) (1) In this section the following words have the meanings indicated. (2) “Merging credit union” means a credit union that is absorbed or acquired by another credit union in a merger and ceases to exist after the merger. (3) “New credit union” means a credit union that is created when two or more credit unions consolidate to form a newly created credit union. (4) “Surviving credit union” means a credit union that absorbs or acquires another credit union in a merger and continues to exist after the merger. (b) (1) (i) With the approval of the Commissioner, any credit union may merge or consolidate as provided in this section. (ii) A merger or consolidation under this section may be with a credit union organized under the laws of the United States, this State, or any other state. (2) (i) A single common bond credit union may merge or consolidate with another single common bond credit union resulting in a surviving or new single common bond credit union provided that the credit unions party to the merger or consolidation share the same single common bond, as defined under § 6–301(c)(2) of this title, prior and subsequent to the merger or consolidation. (ii) A single common bond credit union may merge or consolidate with another single common bond credit union resulting in a surviving or new multiple common bond credit union provided that: 1. Prior to the merger or consolidation, one of the credit unions converts into a multiple common bond credit union, as provided under § 6–304 of this title, which includes in its field of membership the group served by the other single common bond credit union; and 2. The surviving or new multiple common bond credit union satisfies the requirements for multiple common bonds under § 6–301(c)(3) and (e) of this title. (3) A single common bond credit union may merge or consolidate with a multiple common bond credit union resulting in a surviving or new multiple common bond credit union provided that: (i) Prior to the merger or consolidation, the multiple common bond credit union includes or adds to its field of membership the group served by the single common bond credit union, as provided under § 6–303 of this title; and (ii) The surviving or new multiple common bond credit union satisfies the requirements for multiple common bonds under § 6–301(c)(3) and (e) of this title. (4) A multiple common bond credit union may merge or consolidate with another multiple common bond credit union resulting in a surviving or new multiple common bond credit union provided that: (i) 1. Prior to a merger, the credit union that will become the surviving credit union includes or adds to its field of membership the groups served by the credit union that will become the merging credit union, as provided under § 6–303 of this title; or 2. In the case of a consolidation, the field of membership of the new credit union includes all groups that will be served by that new credit union; and (ii) The surviving or new multiple common bond credit union satisfies the requirements for multiple common bonds under § 6–301(c)(3) and (e) of this title. (5) A single or multiple common bond credit union may merge, as the merging credit union, with a community credit union, as the surviving credit union, provided that: (i) 1. The merging credit union has a branch within the community boundaries of the surviving credit union; or 2. A majority of the members in the field of membership of the merging credit union would qualify for membership in the surviving credit union; (ii) No less than 30 days before the effective date of the merger, the merging credit union gives notice of the merger to all groups of potential members of the merging credit union that will be removed from the field of membership as a result of the merger; and (iii) On and after the effective date of the merger, the surviving credit union: 1. May not continue to serve groups within the field of membership of the merging credit union that are located outside the community boundaries of the surviving credit union; and 2. May continue to serve members of a group identified under item 1 of this paragraph who are members before the effective date of the merger. (6) A community credit union may merge or consolidate with another community credit union provided that: (i) The members of the surviving or new credit union remain within a single well–defined local community, neighborhood, rural district, or county; and (ii) The surviving or new credit union is within reasonable geographic proximity to the members of the credit union party to the merger or consolidation. (7) Except as provided in paragraphs (8) and (9) of this subsection, a community credit union may not merge, as a merging credit union, with a single or multiple common bond credit union. (8) Notwithstanding the provisions of paragraph (2), (3), (4), or (5) of this subsection or the numerical limitations prescribed in § 6–301(e) of this title, the Commissioner may approve the merger or consolidation of any credit union with a multiple common bond credit union, as a new or surviving credit union, when safety and soundness concerns are present as determined by the Commissioner. (9) Notwithstanding the provisions of paragraphs (2) through (8) of this subsection, the Commissioner may approve the merger or consolidation of any credit union, whether or not the credit unions party to the merger or consolidation have the same field of membership type, if: (i) Any of the credit unions party to the merger or consolidation is insolvent or likely to become insolvent; (ii) The merger or consolidation is in the best interest of the membership of the credit unions party to the merger or consolidation; and (iii) The merger or consolidation will not adversely affect the financial condition of the surviving or new credit union. (c) (1) If the surviving or new credit union will be a State credit union: (i) The merger or consolidation shall be made in accordance with the provisions of this subtitle; and (ii) If one of the credit unions is a federal credit union, federal law governs its actions and the rights of its members. (2) If the surviving or new credit union will be a federal credit union: (i) The merger or consolidation shall be made in accordance with federal law which governs its actions and the rights of its members; and (ii) The merger or consolidation shall be made in accordance with the provisions of this subtitle for a State credit union and the rights of its members. (3) If the surviving or new credit union will be another State credit union: (i) The merger or consolidation shall be made in accordance with the provisions of this subtitle for the State credit union and the rights of its members; and (ii) The merger or consolidation shall be made in accordance with the provisions of the other State laws for the other State credit union and the rights of its members. (d) A majority of the board of each credit union proposing a merger or consolidation shall: (1) Adopt a resolution that declares that the merger or consolidation is advisable; and (2) Set a date for a vote on the proposed merger or consolidation by the members of each credit union party to the merger or consolidation at any annual or special meeting of the membership or by mail ballot to be filed on or before that date. (e) The Commissioner, at the request of the board, may: (1) Waive the vote of the members; and (2) Substitute any reasonable method of determining the approval by the members. (f) The merger or consolidation shall be in accordance with a plan that: (1) States the field of membership type that the surviving or new credit union will have; (2) Is agreed to by a majority of the board of each credit union party to the merger or consolidation; and (3) Unless provided otherwise by the Commissioner, is approved by the members of each credit union party to the merger or consolidation, by the affirmative vote of a majority of the members of each credit union party to the merger or consolidation who vote on the proposal. (g) (1) After agreement by the board and approval by the members of each credit union party to the merger or consolidation, two officers of each credit union party to the merger or consolidation shall execute a certificate of merger or consolidation. (2) The certificate of merger or consolidation shall include as to each credit union party to the merger or consolidation: (i) The time and place of the meeting of the board at which the plan was agreed to; (ii) The vote by which the plan was agreed to by the board; (iii) A copy of the resolution or other action by which the plan was agreed to by the board; (iv) The date on or by which the plan was approved by the members of each credit union; and (v) Unless provided otherwise by the Commissioner, the vote by which the plan was approved by the members of each credit union. (h) (1) A credit union may merge or consolidate if: (i) 1. The surviving or new credit union meets the common bond requirements of the proposed field of membership type; and 2. Each credit union party to the merger or consolidation files with the Commissioner: A. The certificate of merger or consolidation; B. A copy of the plan of merger or consolidation; and C. Any other documents that the Commissioner deems necessary to make a determination on the application; and (ii) The Commissioner determines that: 1. Each credit union party to the merger or consolidation has not engaged in any material unsafe or unsound practice during the 1–year period preceding the date of filing of the certificate of merger or consolidation; 2. The surviving or new credit union has adequate net worth; 3. The surviving or new credit union has the administrative capability to serve the members of the surviving or new credit union and the financial resources to meet the need for additional staff and assets to serve the surviving or new credit union; and 4. Any potential harm that the surviving or new credit union may have on any other credit union and its membership is clearly outweighed, in the public interest, by the probable beneficial effect of the merger or consolidation in meeting the convenience and needs of the members of the surviving or new credit union. (2) Unless the Commissioner notifies the credit union that a different time period is necessary, within 60 days after the certificate of merger or consolidation is filed, the Commissioner shall: (i) Notify each credit union party to the merger or consolidation of the determination on the application; and (ii) Certify the certificate of merger or consolidation and return the certificate to each credit union party to the merger or consolidation. (i) When the certificate is certified and sent back to the credit unions by the Commissioner: (1) All of the property, property rights, and members’ interest of the credit unions party to the merger or consolidation belong to the surviving or new credit union without deed, endorsement, or other instrument of transfer; (2) All of the debts, obligations, and liabilities of the credit unions party to the merger or consolidation are assumed by the surviving or new credit union; and (3) The rights and privileges of the members of the credit unions party to the merger or consolidation remain intact. (j) (1) The surviving or new credit union shall act promptly to file and record the certified certificate and plan of merger or consolidation with the State Department of Assessments and Taxation. (2) When the certificate and plan of merger or consolidation are filed with the State Department of Assessments and Taxation, the merger or consolidation takes effect.

Md. Code, Financial Institutions § 6-804

(a) Any credit union may dissolve voluntarily, if the board, the members of the credit union, and the Commissioner approve the dissolution as provided in this section. (b) A majority of the board of a credit union proposing to dissolve shall adopt a resolution that: (1) Recommends that the credit union be dissolved voluntarily; and (2) Directs that a proposal of dissolution be submitted to the members. (c) (1) A proposed dissolution shall be approved at an annual or special meeting of the members or by mail ballot by the affirmative vote of two-thirds of the entire membership of the credit union. (2) The Commissioner may substitute any reasonable method of determining the vote of the members. (d) After a proposed dissolution is approved by the members, the credit union shall file with the Commissioner: (1) A copy of the resolution of the board recommending voluntary dissolution, attested to by: (i) The chairman or vice chairman of the board; and (ii) The secretary or treasurer of the credit union; (2) A verified statement of the names and addresses of the officers and directors of the credit union; and (3) The vote by which the voluntary dissolution was approved by the members. (e) (1) If the Commissioner finds that the credit union is solvent, the Commissioner shall issue to the credit union duplicate certificates stating that the credit union appears to have complied with this section. (2) The credit union shall file one of the certificates with the State Department of Assessments and Taxation. (f) When the certificate is filed with the State Department of Assessments and Taxation, the credit union is dissolved. (g) (1) On dissolution, a credit union may operate only to wind up its business and affairs. (2) Under the direction of the Commissioner, the liquidating agent of the dissolved credit union, appointed by the board, shall: (i) Discharge its debts and obligations; (ii) Collect and distribute its assets; and (iii) Do anything else necessary to wind up its business and affairs. (3) For 3 years after the dissolution becomes effective, the credit union, acting by its board and liquidating agent: (i) Shall continue in existence for the purpose of winding up its business and affairs; and (ii) May sue and be sued in its name.

Md. Code, Financial Institutions § 6-805

(a) Any credit union voluntarily may place its business and assets in the hands of the Commissioner for liquidation as provided in this section. (b) A majority of the board proposing a voluntary receivership shall: (1) Adopt a resolution that declares that the voluntary receivership is advisable; and (2) Set a date for a vote on the proposed voluntary receivership by the members of the credit union at an annual or special meeting of the members or by mail ballot to be filed on or before that date. (c) The Commissioner, at the request of the board, may: (1) Waive the vote of the members; and (2) Substitute any reasonable method of determining the approval by the members. (d) Unless the Commissioner takes action under subsection (c) of this section, the proposed voluntary receivership shall be approved by the affirmative vote of a majority of the members of the credit union who vote on the proposal. (e) After the action is approved by the members, the proper officers of the credit union shall certify the action of the members to the Commissioner, and the Commissioner shall post a notice at each office of the credit union that states: “This credit union is in the hands of the Maryland Commissioner of Financial Regulation for liquidation.” (f) If a credit union is placed in the hands of the Commissioner under this section, the Commissioner shall place the credit union in receivership for liquidation in the same manner as provided for a banking institution under Title 5, Subtitle 6 of this article.

Md. Code, Financial Institutions § 6-806

With the approval of the Commissioner, a credit union may purchase the assets or assume the liabilities of another credit union whether or not the credit unions have the same field of membership type, if: (1) The other credit union is insolvent or likely to become insolvent; (2) The purchase or assumption is in the best interest of the membership of the other credit union; and (3) The purchase or assumption will not adversely affect the financial condition of the credit union that makes the purchase or assumption.

Md. Code, Financial Institutions § 6-807

(a) A credit union may establish a branch in the State in accordance with the provisions of this section. (b) (1) A credit union that proposes to establish a branch in the State shall: (i) File with the Commissioner, at least 30 days before the intended opening date, a notice of intention to open a branch; (ii) Submit to the Commissioner any information the Commissioner requires in order to evaluate the proposed branch; and (iii) Pay to the Commissioner a branch fee of $100. (2) The branch fee may not apply to a branch that is acquired by a credit union through a merger or consolidation with, or transfer to the credit union of all or substantially all of the assets of, a credit union. (c) In deciding whether to approve the establishment of a branch, the Commissioner shall consider whether: (1) The establishment of the branch will promote the convenience of the members of the credit union; (2) The applicant has sufficient net worth to support the branch; and (3) The applicant generally is operating in compliance with the provisions of this title. (d) (1) The Commissioner shall decide whether to approve the establishment of a branch within 30 days of receipt of the notice specified in subsection (b)(1) of this section. (2) The establishment of a branch shall be deemed approved if the Commissioner takes no action on the notice within the time limit specified in this subsection.

Md. Code, Financial Institutions § 6-808

(a) An out-of-state credit union shall provide the Commissioner, within 15 days of opening a branch in the State, with a notice of the opening of the branch. (b) A credit union chartered and primarily regulated by another state that proposes to establish a branch in this State shall qualify under § 7-203 of the Corporations and Associations Article to do business in the State as a foreign corporation. (c) An out-of-state credit union that has a branch in this State may establish additional branches in this State: (1) To the same extent as a credit union; or (2) To the extent otherwise permitted by federal law.

Md. Code, Financial Institutions § 6-809

(a) A credit union may require not more than 60 days’ notice of a member’s intention to withdraw from a share account or deposit account. (b) A requirement imposed under subsection (a) of this section shall: (1) Apply to all members of the credit union; and (2) Be included in each member’s account agreement.

Md. Code, Financial Institutions § 6-901

(a) (1) Except for a credit union authorized to do business in this State, a person may not: (i) Use or advertise any name or title that contains the words “credit union” or any derivation of that term; (ii) Represent itself as a credit union; (iii) Conduct business as a credit union; or (iv) Conduct business under a name or title that: 1. Indicates or reasonably implies that the person engages in or transacts the type of business conducted by a credit union; or 2. Is calculated to lead a person to believe that the business engaged in or transacted is the type of business conducted by a credit union. (2) Any person who violates any provision of this subsection is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $3,000 or imprisonment not exceeding 5 years or both per occurrence. (b) This section does not apply to an association or league of credit unions, whether or not the association or league is incorporated.

Md. Code, Financial Institutions § 6-902

(a) A person may not willfully make, circulate, or send to another person any untrue statement that is derogatory to the financial condition or that affects the solvency or financial standing of any credit union doing business in the State, or counsel, aid, procure, or induce another to make, circulate, or send to another person such a statement. (b) A person that violates any provision of this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $1,000 or imprisonment not exceeding 3 years or both.

Md. Code, Financial Institutions § 6-903

(a) An officer, official, or employee of a credit union may not willfully and knowingly make or cause to be made a false statement or false entry in the records of the credit union or, with the intent to deceive a person authorized to examine the affairs of the credit union, sign or exhibit false records. (b) An officer, official, or employee who violates any provision of this section is guilty of a felony and on conviction is subject to a fine not exceeding $5,000 or imprisonment not exceeding 10 years or both.

Md. Code, Financial Institutions § 6-904

(a) An officer or official who in any way knowingly permits or participates in making a loan in violation of § 6-611 of this title is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $3,000 or imprisonment not exceeding 5 years or both, per occurrence. (b) If a loan is made in violation of § 6-611 of this title, the credit union may recover the amount of the loan from: (1) Any borrower; or (2) Any officer or official who knowingly permitted or participated in making the loan.

Md. Code, Financial Institutions § 6-905

(a) The Commissioner may order a credit union, or enter into an agreement with a credit union, to take corrective action if the Commissioner finds that the credit union: (1) Has failed to file a report when due; (2) Is insolvent; (3) Has violated any provision of this title; or (4) Is engaged in an unsafe or unauthorized practice. (b) (1) Before the order becomes effective, the Commissioner shall give the credit union an opportunity for a hearing. (2) Notice of the hearing shall be given and the hearing shall be held in accordance with Title 10 of the State Government Article. (c) If the Commissioner determines that the violation or practice under subsection (a) of this section requires immediate action to protect depositors or members, the Commissioner: (1) May issue a cease and desist order that is effective on service; and (2) Shall give the credit union an opportunity for a hearing to rescind the order. (d) If the credit union fails to comply with the order within 60 days after it becomes effective, the Commissioner may: (1) Take possession of the business and assets of the credit union and operate it until the Commissioner permits it to resume business or until the Commissioner orders its liquidation under item (3) of this subsection; (2) Order the credit union share guaranty corporation that insures the credit union to take possession of the business and assets of the credit union and operate it in accordance with the Commissioner’s instructions until the Commissioner permits it to resume business or until the Commissioner orders its liquidation under item (3) of this subsection; or (3) Place the credit union in receivership for liquidation in the same manner as provided for a banking institution under Title 5, Subtitle 6 of this article.

Md. Code, Financial Institutions § 6-906

(a) The Commissioner shall order any credit union to cease and desist from: (1) An unsafe or unsound practice; (2) A practice that is injurious to the public interest; or (3) A violation of laws or rules or regulations that relate to the Commissioner’s supervision of the credit union. (b) To protect depositors or members, the Commissioner may include in a cease and desist order a restriction on the withdrawal of money from any credit union. (c) The Commissioner may include in a cease and desist order a requirement that the officers or officials act affirmatively to correct any violation or practice. (d) (1) Before a cease and desist order takes effect, the Commissioner shall give the credit union an opportunity for a hearing. (2) Notice of the hearing shall be given and the hearing shall be held in accordance with Title 10 of the State Government Article. (e) If the Commissioner determines that the violation or practice under subsection (a) of this section requires immediate action to protect depositors or members, the Commissioner: (1) May issue a cease and desist order that is effective on service; and (2) Shall give the credit union an opportunity for a hearing to rescind the order.

Md. Code, Financial Institutions § 6-906.1

§6–906.1. (a) After notice and a hearing, the Commissioner may assess a civil penalty against a credit union that the Commissioner determines has: (1) Violated a cease and desist order issued by the Commissioner under § 6–906 of this subtitle; or (2) Engaged in: (i) An unsafe or unsound practice; or (ii) A practice that is injurious to the public interest. (b) The civil penalty may not exceed: (1) $1,000 per violation; and (2) $1,000 per violation for each day that the violation continues. (c) (1) A civil penalty shall be assessed by written notice of assessment served on the person to be assessed. (2) The notice of assessment shall state the: (i) Amount of the civil penalty; (ii) Legal authority for the assessment; and (iii) Matters of fact or law constituting the grounds for the assessment. (3) The notice of assessment shall constitute a final order for purposes of judicial review pursuant to § 10–221 of the State Government Article. (d) In determining the amount of the civil penalty to be assessed, the Commissioner shall consider: (1) The seriousness of the violation; (2) The good faith of the violator; (3) The violator’s history of previous violations; (4) The deleterious effect of the violation on the public and the credit union industry; (5) The assets of the violator; and (6) Any other factors relevant to the determination of the civil penalty. (e) (1) A civil penalty assessed under this section shall be due and payable within 30 days after the Commissioner issues the notice of assessment. (2) The Commissioner may reduce or set aside a civil penalty. (f) The Commissioner shall pay all civil penalties collected under this section into the General Fund of the State.

Md. Code, Financial Institutions § 6-906.2

§6–906.2. (a) In this section, “extraordinary circumstances” means a situation presenting specific concerns about the prompt withdrawal of money from, or the safety and soundness of, a credit union. (b) In extraordinary circumstances and with the consent of the credit union, the Commissioner may close to the public a hearing concerning the assessment of a civil penalty, an order to cease and desist, or any other formal enforcement action by the Commissioner.

Md. Code, Financial Institutions § 6-907

(a) (1) If the Commissioner believes that an officer or official has engaged in an unsafe or unsound practice, the Commissioner shall send a warning to the officer or official. (2) If the Commissioner finds that the officer or official has continued to engage in the unsafe or unsound practice, the Commissioner may report the facts to the Secretary of Labor and the Attorney General. (3) A copy of the report shall be sent by certified mail, return receipt requested, bearing a postmark from the United States Postal Service, to each director of the credit union. (b) (1) If the Commissioner finds that the unsafe or unsound practice continues after the warning and the officer, official, agent, or employee was provided an opportunity to be heard, the Commissioner may remove the officer, official, agent, or employee with the approval of the Secretary of Labor. (2) Notice of the hearing shall be given and the hearing shall be held in accordance with Title 10 of the State Government Article. (c) A copy of the removal order shall be served on the individual removed and the credit union. (d) If the Commissioner determines that the unsafe or unsound practice under subsection (a) of this section requires immediate action to protect depositors or members, the Commissioner: (1) May issue a cease and desist order that is effective on service; and (2) Shall give the officer or official an opportunity for a hearing to rescind the order.

Md. Code, Financial Institutions § 6-908

(a) If the Commissioner believes that any officer, official, agent, or employee of a credit union has violated any provision of this title, the Commissioner may report the violation directly to the Secretary of Labor and to the Attorney General who shall take the appropriate steps to institute a prosecution for the violation. (b) (1) The Commissioner shall send a written warning to an officer, official, agent, or employee of a credit union who the Commissioner believes has violated any provision of this title. (2) If after a warning the violation continues, the officer, official, agent, or employee may be removed as provided in § 6–907(b) of this subtitle. (3) Unless otherwise specified, any officer, official, agent, or employee of a credit union who violates the provisions of this title is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $3,000 or imprisonment not exceeding 5 years. (c) If the Commissioner determines that the violation under subsection (a) of this section requires immediate action to protect depositors or members, the Commissioner: (1) May issue a cease and desist order that is effective on service; and (2) Shall give the officer, official, agent, or employee an opportunity for a hearing to rescind the order.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://mgaleg.maryland.gov/mgawebsite/Laws/StatutesFetched: 10/16/2026