Financial Code
Part 3 of 17 · provisions 401–600
This section says the act may be cited as the Financial Code.
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The commissioner must let certain debt collectors keep operating if they applied before January 1, 2023, and may issue a conditional license while an application is pending. Local governments in this state may not require a debt collector to be licensed or to register as a debt collector. This division is named the Debt Collection Licensing Act and may be cited by that name. A person may not do debt collection business in this state without first getting a license, and the license is tied to the principal place of business and cannot be transferred or assigned. This section defines key terms used in the Debt Collection Licensing Act.
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- 1423. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
A depository institution that fails to comply with this article can be liable for actual damages, certain additional amounts, costs, and attorney’s fees, subject to limits and a one-year filing period.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1423. Except as otherwise provided in this section, any depository institution which fails to comply with any requirement imposed pursuant to this article shall be liable to the aggrieved party in an amount equal to the sum of any actual damage sustained by the person as a result of the failure; and, in the case of an individual action an additional amount as the court may allow, except that the amount shall not be less than fifty dollars ($50) or greater than five hundred dollars ($500); or, in the case of a class action, such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable, and the total recovery in any class action or series of class actions arising out of the same failure to comply by the same depository institution shall not be more than the lesser of five hundred thousand dollars ($500,000) or 1 percent of the net worth of the depository institution; and, in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as determined by the court. In determining the amount of award in any class action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance, the resources of the depository institution, the number of persons adversely affected, and the extent to which the failure of compliance was intentional. A depository institution may not be held liable in any action brought under this section for a violation of this article if the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. Examples of a bona fide error include, but are not limited to, clerical, calculation, computer malfunction and programming, and printing errors. An error of legal judgment with respect to a person’s obligations under this article shall not constitute a bona fide error. Any action under this section may be brought in any court of competent jurisdiction, within one year from the date of the occurrence of the violation. No provision of this section imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule, regulation, or interpretation thereof by the Federal Reserve Board or in conformity with any interpretation or approval by an official or employee of the Federal Reserve System duly authorized by the board to issue interpretations or approvals under such procedures as the board may prescribe therefor, notwithstanding that after any act or omission has occurred, the rule, regulation, interpretation, or approval is amended, rescinded, or determined by judicial or other authority to be invalid for any reason. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1424. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
The commissioner must issue regulations defining a reasonable time for customers to draw on deposited items, and retail banking customers are meant to have a right to withdraw within a reasonable period.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1424. The commissioner shall issue administrative regulations to define a reasonable time for permitting customers to draw on items received for deposit in the customer’s account. It is the public policy of this state to provide retail banking customers with the right to withdraw against items deposited with any depository institution located in this state within a reasonable period of time. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1425. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
The commissioner must issue and annually review regulations setting a reasonable time for a depository institution to let a customer draw on a deposited item as a matter of right.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1425. Pursuant to Section 1424, the commissioner shall promulgate regulations which shall be reviewed annually to establish a reasonable period of time within which a depository institution must permit a customer to draw as a matter of right on an item which has been received for deposit in the customer’s account. In determining what constitutes a reasonable period of time the commissioner shall consider the following factors: (a) The actual time for processing and transport between the depository and payer institutions. (b) The fastest air transport time between depository and payer institutions to be used for purposes of setting the reasonable time for transport. (c) The most expeditious route and means for processing of returned items. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 14250. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. )
The commissioner may inspect credit unions and their records, and must examine each California credit union at least every two years.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14250. (a) (1) The commissioner may at any time investigate into the affairs and examine the books, accounts, records, files, and any office within or outside of this state used in the business of every credit union, whether it acts or claims to act under or without authority of this division. (2) The commissioner and the commissioner’s duly designated representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of a credit union referred to in paragraph (1). (3) The officers and employees of a credit union being examined shall exhibit to the examiners, on request, any or all of its securities, books, records, and accounts and shall otherwise cooperate with the examination so far as it is in their power. (b) (1) The commissioner shall examine every credit union organized under the laws of this state to the extent and whenever and as often as the commissioner shall deem it advisable but in no case less than once every two years. (2) For purposes of this subdivision, an examination made by the commissioner in conjunction with or with assistance from the National Credit Union Administration or a credit union regulatory agency of another state of the United States is deemed to be an examination made by the commissioner. (3) For purposes of this subdivision, an examination made by the National Credit Union Administration pursuant to an alternating examination schedule approved by both the commissioner and the National Credit Union Administration is deemed to be an examination made by the commissioner. (4) This subdivision does not require the commissioner to make an examination onsite at the offices of a credit union. (Amended by Stats. 2021, Ch. 762, Sec. 1. (SB 269) Effective January 1, 2022.) - 14251. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. )
The commissioner may examine a credit union if a credit union officer or director gives written consent.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14251. The commissioner upon the written consent of any credit union officer or director may make any examination of the credit union in any regularly established office of the commissioner. (Repealed and added by Stats. 1979, Ch. 112.) - 14252. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. )
Credit unions above or below the $10 million asset threshold must file annual audit reports with the commissioner within 105 days after fiscal year end, subject to any extension the commissioner allows.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14252. (a) A credit union with total assets equal to or greater than ten million dollars ($10,000,000) shall, within 105 days after the end of each fiscal year or within any extended time that the commissioner may specify, file with the commissioner an audit report for the fiscal year. (b) The audit report called for in subdivision (a) shall comply with all of the following provisions: (1) The audit report shall contain the audited financial statements of the credit union for, or as of the end of, the fiscal year, prepared in accordance with generally accepted accounting principles that the commissioner may specify, and any other information that the commissioner may specify. (2) The audit report shall be based upon an audit of the credit union, conducted in accordance with generally accepted auditing standards, and any other requirements that the commissioner may specify. (3) The audit report shall be prepared by an independent certified public accountant or independent public accountant who is acceptable to the commissioner. (4) The audit report shall include, or be accompanied by, a certificate or opinion of the independent certified public accountant or independent public accountant that is satisfactory in form and content to the commissioner. If the certificate or opinion is qualified, the commissioner may order the credit union to take any action that the commissioner may find necessary or advisable to enable the independent certified public accountant or independent public accountant to remove the qualification. (c) A credit union with total assets of less than ten million dollars ($10,000,000) shall, within 105 days after the end of each fiscal year or within any extended time that the commissioner may specify, file with the commissioner an audit report for the fiscal year. (d) The audit report called for in subdivision (c) may comply with all the provisions of subdivision (b), or may consist of alternative procedures acceptable to the commissioner. An alternative procedures audit may be performed by any of the following: (1) An independent certified public accountant. (2) An independent public accountant. (3) The credit union’s supervisory or audit committee, as applicable, provided that the audit complies with the requirements of Section 14253. (e) Notwithstanding subdivision (d), the commissioner may reject an alternative procedures audit that he or she determines is not satisfactory. If the commissioner rejects an alternative procedures audit for any reason, he or she may order a credit union to obtain an audit that is satisfactory to the commissioner. (f) The commissioner may, by order or regulation, either unconditionally or upon specified terms and conditions, grant an exemption from this section in any case where the commissioner finds that the requirements of this section are not necessary or advisable. (Amended by Stats. 2016, Ch. 353, Sec. 2. (AB 2274) Effective January 1, 2017.) - 14253. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. )
A credit union must, when the commissioner asks, submit unaudited financial statements prepared under generally accepted accounting principles. The commissioner may also require these reports monthly or on another periodic basis.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14253. A credit union shall, when requested by the commissioner, submit its unaudited financial statements, prepared in accordance with generally accepted accounting principles and consisting of at least a balance sheet and statement of income as of the date and for the period specified by the commissioner. The commissioner may require the submission of such reports on a monthly or other periodic basis. (Repealed and added by Stats. 1979, Ch. 112.) - 14254.5. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. )
Credit unions must notify the commissioner in writing within 10 business days after opening, closing, or moving a branch office. They also may not open a branch in another state or in a foreign nation without the required approval.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14254.5. (a) Except as provided in subdivisions (b) and (c), within 10 business days of opening, closing, or relocating a branch office, a credit union shall notify the commissioner in writing of the action, including the street and mailing addresses of the branch office. (b) A credit union shall not establish a branch office in another state of the United States without the approval of the governmental authority with jurisdiction to license or charter credit unions in that state. “State” has the meaning set forth in Section 207. (c) A credit union shall not establish a branch office in a foreign nation without the prior written approval of the commissioner. “Foreign nation” has the meaning set forth in Section 175. (Amended by Stats. 2014, Ch. 64, Sec. 15. (AB 2742) Effective January 1, 2015.) - 14255. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. )
Credit unions must file special reports with the commissioner when required, in the form and by the date the commissioner sets.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14255. Every credit union shall make other special reports to the commissioner as the commissioner may from time to time require. Such reports shall be in the form and filed at such date as prescribed by the commissioner, and shall if required by him, be verified in such manner as he prescribes. (Repealed and added by Stats. 1979, Ch. 112.) - 14256. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. )
A credit union that misses required report filing deadlines, including any extension, or leaves out required information may face certificate suspension or revocation, and the commissioner may also impose a civil penalty.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14256. (a) If any credit union fails to file with the commissioner any report required by this division on or before the day designated for the filing of the report or, if the time for filing the report is extended by the commissioner, within the extended time, or fails to include in the report any matter required by the commissioner, the failure is grounds for the suspension or revocation of the certificate authorizing the credit union to act as a credit union. (b) If any credit union fails to file with the commissioner any report required by this division or by any order or regulation of the commissioner, on or before the day designated for the filing of the report or, if the time for filing the report is extended by the commissioner, within the extended time, or fails to include in the report any matter required by the commissioner, the commissioner may order the credit union to pay to the commissioner a civil penalty imposed pursuant to Section 329. (Amended by Stats. 2014, Ch. 64, Sec. 16. (AB 2742) Effective January 1, 2015.) - 14257. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. )
Examination reports prepared by the commissioner’s designated representatives are confidential and not public records, but they may be shared with certain credit union personnel and retained auditors or attorneys under limited conditions.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Examinations and Reports [14250 - 14257] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14257. Investigation and examination reports prepared by the commissioner’s duly designated representatives shall not be public records. The reports may be disclosed to the officers, directors, members of the supervisory committee, members of the credit committee, and key management personnel of the credit union that is the subject of a report for the purpose of corrective action by those persons. The examination report may also be disclosed to internal and external auditors and attorneys that are retained by the subject credit union, but only to the extent necessary for the auditors and attorneys to perform work related to issues addressed in the examination report. The disclosure shall not operate as a waiver of the exemption specified in Section 7929.000 of the Government Code. (Amended by Stats. 2021, Ch. 615, Sec. 109. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.) - 1426. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
The commissioner may gather information from depository institutions when needed to formulate and promulgate the regulations required by Section 1424.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1426. The commissioner is authorized to gather from depository institutions such information as may be necessary for the formulation and promulgation of the regulations required by Section 1424. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1427. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
The first regulations under this article must be issued on or before July 1, 1984.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1427. The first regulations issued pursuant to this article shall be issued on or before July 1, 1984. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1428. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
The commissioner may issue regulations setting a different withdrawal period for deposited items when the current regulations would create unsafe or unsound practices for a regulated depository institution.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1428. The commissioner is authorized to issue regulations which provide for a different period of time for withdrawal as a matter of right against deposited items, if there has been a determination that the application of the regulations adopted pursuant to this article would result in unsafe or unsound practices by a depository institution subject to the regulatory jurisdiction of the commissioner. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1429. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
Certain check deposits must be made available on the second business day, unless a narrow exception applies.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1429. (a) Funds deposited in an account at a depository institution shall be available on the second business day after the business day on which those funds are deposited in the case of a cashier’s check, certified check, teller’s check, or depository check subject to the following: (1) The check is endorsed only by the person to whom it was issued. (2) The check is deposited in a receiving depository institution that is staffed by individuals employed by that institution. (3) The check is deposited with a special deposit slip that indicates it is a cashier’s check, certified check, teller’s check, or depository check, as the case may be. (4) The check is deposited into an account in the name of a customer that has maintained any account with the receiving depository institution for a period of 60 days or more. (5) The face amount of the check is for five thousand dollars ($5,000) or less. In the case of funds deposited on any business day in an account at a depository institution by depository checks, the aggregate amount of which exceeds five thousand dollars ($5,000), this subdivision shall apply only with respect to the first five thousand dollars ($5,000) of the aggregate amount. (b) Subdivision (a) does not apply to a depository check if the receiving depository institution reasonably believes that the check is uncollectible from the originating depository institution. For purposes of this subdivision, “reasonable cause to believe” requires the existence of facts that would cause a well-grounded belief in the mind of a reasonable person. These reasons shall include, but not be limited to, a belief that (1) the drawer or drawee of the depository check has been, or will imminently be, the subject of an order for relief in bankruptcy or placed in receivership or (2) the depository check may be involved in a fraud or in a scheme commonly known as “kiting.” In these situations, the depository institution electing to proceed under this subdivision shall so notify the drawer and drawee no later than the close of the next business day following deposit of the depository check. (c) For purposes of this section, the following terms have the following meanings: (1) “Account” means any demand deposit account and any other similar transaction account at a depository institution. (2) “Business day” means any day other than a Saturday, Sunday, or legal holiday. (3) “Cashier’s check” means any check that is subject to the following: (A) The check is drawn on a depository institution. (B) The check is signed by an officer or employee of the depository institution. (C) The check is a direct obligation of the depository institution. (4) “Certified check” means any check with respect to which a depository institution certifies the following: (A) That the signature on the check is genuine. (B) The depository institution has set aside funds that are equal to the amount of the check and will be used only to pay that check. (5) “Depository check” means any cashier’s check, certified check, teller’s check, and any other functionally equivalent instrument, as determined by the Board of Governors of the Federal Reserve System or the commissioner. (6) “Depository institution” has the meaning given in clauses (i) to (vi), inclusive, of Section 19(b)(1)(A) of the Federal Reserve Act. (7) “Teller’s check” means any check issued by a depository institution and drawn on another depository institution. (d) Except for the specific circumstances and checks described in this section, this section is not intended to restrict or preempt the regulatory authority of the commissioner. (e) In the event of a suspension or modification of any similar provisions in the federal Expedited Funds Availability Act, the effect of this section shall be similarly suspended or modified. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 143. Verify source ↗
## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )
This section defines “Articles” by referring to Section 154 of the Corporations Code.
## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 143. “Articles” has the meaning set forth in Section 154 of the Corporations Code. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.) - 14300. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
This section defines several terms used in the chapter, including “officer with a subject institution,” “subject institution,” “subject person,” and “violation.”
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14300. For purposes of this chapter, the following terms shall have the following meanings: (a) “Officer with a subject institution” means the position of director, officer, or employee with the subject institution. (b) “Subject institution” means any of the following: (1) A California credit union. (2) A subsidiary of a California credit union. (3) A foreign, whether other state or other nation, credit union, other than a federal credit union, that maintains an office in this state, with respect to the office. (4) Any other person, other than a federal credit union, conducting business in this state. (c) “Subject person,” when used with respect to a subject institution, means any of the following: (1) A director, officer, employee, or agent of the subject institution. (2) A member, consultant, joint venture partner, or other person that participates in the affairs of a subject institution. (3) An independent contractor, including an appraiser or accountant, who knowingly or recklessly participates in any of the following acts if the act caused or is likely to cause a material financial loss to, or a significant adverse effect on, the subject institution. (A) A violation of any applicable law, regulation, or order. (B) A breach of fiduciary duty. (C) An unsafe or unsound act. (d) “Violation” includes any act done alone or with other persons for or toward causing, bringing about, participating in, counseling, aiding, or abetting a violation of any applicable statute, regulation, provision of a written order issued by the commissioner, or provision of a written operating agreement signed by the commissioner and a subject institution or subject person. (Repealed and added by Stats. 2002, Ch. 734, Sec. 18. Effective September 20, 2002.) - 14301. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
The person to whom an order is issued may waive any notice or hearing requirement in this chapter before the commissioner issues the order.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14301. Any requirement in this chapter for notice or hearing before the commissioner issues an order may be waived by the person to whom the order is issued. (Repealed and added by Stats. 2002, Ch. 734, Sec. 20. Effective September 20, 2002.) - 14302. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
The commissioner may sue in superior court to stop violations, enforce compliance, and collect penalties or other liabilities, and the court may order injunctions, appoint court officers, and award ancillary relief.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14302. (a) The commissioner may bring an action in the name of the people of this state in the superior court to enjoin any violation of, to enforce compliance with, or to collect any penalty or other liability imposed under, this division or any regulation or order issued under this division. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted, and a monitor, receiver, conservator, or other designated fiduciary or officer of the court may be appointed for the defendant or the defendant’s assets, or other relief may be granted as appropriate. (b) A receiver, monitor, conservator, or other designated fiduciary officer of the court appointed by the court pursuant to this section may, with the approval of the court, exercise all powers of the defendant’s officers, directors, partners, trustees, or persons who exercise similar powers and perform similar duties. No action at law or in equity may be maintained by any party against the commissioner, or a receiver, monitor, conservator, or other designated fiduciary or officer of the court by reason of their exercising these powers or performing these duties pursuant to the order of, or with the approval of, the court. (c) If the commissioner finds that it is in the public interest, the commissioner may include in an action authorized by subdivision (a) a claim for ancillary relief, including a claim for restitution, disgorgement, or damages on behalf of the person injured by the act or practice constituting the subject matter of the action, and the court shall have jurisdiction to award ancillary relief. (d) Neither the provision of subdivision (a) that authorizes the appointment of a monitor, receiver, conservator, or other designated fiduciary or officer of the court, nor any provision of subdivision (b) or (c), applies to any of the following: (1) A California credit union that is authorized by the commissioner to transact credit union business. (2) A foreign, whether other state or other nation, credit union that maintains an office in this state in accordance with federal law, the law of this state, and the law of the credit union’s domicile. (e) The provisions of this section that authorize the commissioner to bring actions and seek relief are not intended to, and do not, affect any right that another person may have to bring the same or similar actions or to seek the same or similar relief. (Repealed and added by Stats. 2002, Ch. 734, Sec. 22. Effective September 20, 2002.) - 14303. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
The commissioner may issue a cease-and-desist order without prior notice or hearing, and the person named in the order may seek a hearing and judicial review.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14303. (a) The commissioner may, without any prior notice or hearing, order a person to cease and desist from violating Section 14150 if either of the following criteria are met: (1) The commissioner finds that the person has violated Section 14150. (2) The commissioner finds that there is reasonable cause to believe that the person will imminently violate Section 14150. (b) (1) (A) Within 30 days after an order is issued pursuant to subdivision (a), the person to whom the order is issued may file with the commissioner an application for a hearing on the order. (B) If the commissioner fails to commence the hearing within 15 business days after the application is filed with the commissioner, or within any longer period to which the person consents, the order shall be deemed rescinded. (C) Within 30 days after the hearing, or within any longer period to which the person consents, the commissioner shall affirm, modify, or rescind the order. If the commissioner fails to affirm, modify, or rescind the order within this time limit, the order shall be deemed rescinded. (2) The right of a person to whom an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the person to apply to the commissioner for a hearing on the order pursuant to paragraph (1). (Repealed and added by Stats. 2002, Ch. 734, Sec. 24. Effective September 20, 2002.) - 14304. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
After notice and a hearing, the commissioner may order a subject institution or subject person to stop an action or violation if certain unsafe, unsound, or unlawful conditions are found.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14304. If, after notice and a hearing, the commissioner finds any of the factors set forth in subdivision (a) or (b) with respect to a subject institution or subject person, the commissioner may order the subject institution or subject person to cease and desist from the action or violation: (a) That the subject institution or subject person has engaged or participated, is engaging or participating, or that there is reasonable cause to believe that the subject institution or subject person will imminently engage or participate in any unsafe or unsound act with respect to the business of the subject institution. (b) That the subject institution or subject person has violated, is violating, or that there is reasonable cause to believe that the subject institution or subject person will imminently violate, any provision of this division, of any regulation or order issued under this division, of any other applicable law, or of any written agreement with the commissioner. (Repealed and added by Stats. 2002, Ch. 734, Sec. 26. Effective September 20, 2002.) - 14305. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
The commissioner may order a subject institution or subject person to stop an action or violation if certain findings are made, and the affected party can request a hearing and later seek judicial review.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14305. (a) If the commissioner finds that any of the factors set forth in Section 14304 is true with respect to a subject institution or subject person and that the action or violation is likely to have any of the consequences set forth in paragraphs (1) to (4), inclusive, the commissioner may, without any prior notice or hearing, order the subject institution or subject person to cease and desist from the action or violation: (1) To cause the insolvency of the subject institution. (2) To cause significant dissipation of the assets or earnings of the subject institution. (3) To weaken the condition of the subject institution. (4) To otherwise prejudice the interests of the members of the subject institution. (b) (1) (A) Within 30 days after an order is issued pursuant to subdivision (a), any subject institution or subject person to whom the order is issued may file with the commissioner an application for a hearing on the order. (B) If the commissioner fails to commence the hearing within 15 business days after the application is filed with the commissioner, or within any longer period to which the subject institution or subject person consents, the order shall be deemed rescinded. (C) Within 30 days after the hearing, or within any longer period to which the subject institution or subject person consents, the commissioner shall affirm, modify, or rescind the order. If the commissioner fails to affirm, modify, or rescind the order within this time limit, the order shall be deemed rescinded. (2) The right of any subject institution or subject person to whom an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the subject institution or subject person to apply to the commissioner for a hearing on the order pursuant to paragraph (1). (Added by Stats. 2002, Ch. 734, Sec. 27. Effective September 20, 2002.) - 14306. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
An enforcement order may require a subject institution or person to fix the problem, make restitution or other compensation, limit growth or business activities, dispose of involved assets, correct legal violations, and hire qualified staff; the commissioner may also approve those staff.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14306. An order issued pursuant to Sections 14303 to 14305, inclusive, may include any of the following provisions: (a) Require the subject institution or subject person to take affirmative action to correct any condition resulting from the action or violation, including any of the following actions: (1) To make restitution or provide reimbursement, indemnification, or guarantee against loss, if the subject institution or subject person was unjustly enriched in connection with the action or violation or if the action or violation involved a reckless disregard for any provision of this division, any regulation or order issued under this division, any other applicable law, or any agreement with the commissioner. (2) Restrict the growth of the subject institution. (3) Dispose of any loan or other asset involved. (4) Correct violations of law. (5) Employ qualified officers or employees, who may be subject to approval of the commissioner. (6) Take any other action that the commissioner may find to be necessary or advisable. (b) Limit the business activities or functions of the subject institution or subject person. (Added by Stats. 2002, Ch. 734, Sec. 28. Effective September 20, 2002.) - 14307. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
If a subject institution’s books or records are too incomplete or inaccurate, the commissioner may order it to stop the activity that caused the problem or to fix the records.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14307. (a) If the commissioner finds that a subject institution’s books or records are so incomplete or inaccurate that the commissioner is unable through the normal supervisory process to determine the financial condition of the subject institution or of the details or purpose of any transaction or transactions that may materially affect the financial condition of the subject institution, the commissioner may, without any prior notice or hearing, order the subject institution to do any of the following: (1) To cease any activity or practice that gave rise, in whole or in part, to the incomplete or inaccurate state of the books or records. (2) To take affirmative action to restore the books or records to a complete and accurate state. (b) (1) (A) Within 30 days after an order is issued pursuant to subdivision (a), any subject institution or subject person to whom the order is issued may file with the commissioner an application for a hearing on the order. (B) If the commissioner fails to commence the hearing within 15 business days after the application is filed with the commissioner, or within any longer period to which the subject institution or subject person consents, the order shall be deemed rescinded. (C) Within 30 days after the hearing, or within any longer period to which the subject institution or subject person consents, the commissioner shall affirm, modify, or rescind the order. If the commissioner fails to affirm, modify, or rescind the order within this time limit, the order shall be deemed rescinded. (2) The right of any subject institution or subject person to whom an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the subject institution or subject person to apply to the commissioner for a hearing on the order pursuant to paragraph (1). (Added by Stats. 2002, Ch. 734, Sec. 29. Effective September 20, 2002.) - 14308. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
After notice and a hearing, the commissioner may suspend or remove a subject person and bar them from participating in the subject institution’s affairs without approval, if the listed factors are found true.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14308. If, after notice and a hearing, the commissioner finds that any of the factors set forth in subdivision (a), any of the factors set forth in subdivision (b), and any of the factors set forth in subdivision (c) are true with respect to a subject person of a subject institution, the commissioner may issue an order suspending or removing the subject person from the subject person’s office, if any, with the subject institution and prohibiting the subject person from participating in any manner in the conduct of the affairs of the subject institution without the approval of the commissioner: (a) (1) That the subject person has, directly or indirectly, violated any provision of this division, of any regulation or order issued under this division, of any other applicable law relating to the business of the licensee, or of any written agreement with the commissioner. (2) That the subject person has, directly or indirectly, engaged or participated in any unsafe or unsound act in connection with the business of the subject institution or any other business institution. (3) That the subject person has, directly or indirectly, engaged or participated in any act which constitutes a breach of the subject person’s fiduciary duty. (b) That, by reason of the act, violation, or breach of fiduciary duty described in subdivision (a) the following have occurred: (1) The subject institution or business institution has suffered or will probably suffer financial loss or other damage. (2) The interests of the members of the subject institution have been or could be prejudiced. (3) The subject person has received financial gain or other benefit. (c) That the act, violation, or breach of fiduciary duty described in subdivision (a) either involves dishonesty on the part of the subject person or demonstrates the subject person’s willful or continuing disregard for the safety or soundness of the subject institution or business institution. (Added by Stats. 2002, Ch. 734, Sec. 30. Effective September 20, 2002.) - 14309. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
The commissioner may issue an immediate order suspending a subject person and barring participation in the institution’s affairs if specified Section 14308 factors are found and action is needed to protect the institution or its members.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14309. (a) If the commissioner finds that any of the factors set forth in subdivision (a) of Section 14308, any of the factors set forth in subdivision (b) of Section 14308, and any of the factors set forth in subdivision (c) of Section 14308 are true with respect to a subject person of a subject institution, and that an action is necessary or advisable for the protection of the subject institution or the interests of the members of the subject institution, the commissioner may, without any prior notice or hearing, issue an order that does both of the following: (1) Suspends the subject person from the subject person’s office, if any, with the subject institution. (2) Prohibits the subject person from participating in any manner in the conduct of the affairs of the subject institution without the approval of the commissioner. (b) (1) (A) Within 30 days after an order is issued pursuant to subdivision (a), any subject person to whom the order is issued may file with the commissioner an application for a hearing on the order. (B) If the commissioner fails to commence the hearing within 15 business days after the application is filed with the commissioner or within any longer period to which the subject person consents, the order shall be deemed rescinded. (C) Within 30 days after the hearing or within any longer period to which the subject person consents, the commissioner shall affirm, modify, or rescind the order. If the commissioner fails to affirm, modify, or rescind the order within this time limit, the order shall be deemed rescinded. (2) The right of any subject person to whom an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the subject person to apply to the commissioner for a hearing on the order pursuant to paragraph (1). (Added by Stats. 2002, Ch. 734, Sec. 31. Effective September 20, 2002.) - 14310. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
The commissioner may suspend or remove a subject person and bar further participation in a subject institution’s affairs when specified criminal charge or conviction and risk findings are met.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14310. (a) If the commissioner finds that any of the factors set forth in paragraph (1) and the factor set forth in paragraph (2) are true with respect to a subject person or former subject person of a subject institution, the commissioner may, without any prior notice or hearing, issue an order suspending the subject person or former subject person from his or her office, if any, with the subject institution and prohibiting him or her from further participating in any manner in the conduct of the affairs of the subject institution without the approval of the commissioner: (1) That the subject person or former subject person has been charged in an indictment issued by a grand jury or in an information, complaint, or similar pleading issued by a United States attorney, district attorney, or other governmental official or agency authorized to prosecute crimes, with commission of or participation in any of the following crimes: (A) A crime that involves dishonesty or breach of trust and that is punishable by imprisonment for a term exceeding one year. (B) A criminal violation of any provision of this division. (C) A criminal violation of Section 1956, 1957, or 1960 of Title 18 of, or Section 5322 or 5324 of Title 31 of, the United States Code. (D) A criminal violation of a law of any jurisdiction other than the United States that is substantially similar to any of the statutes specified in subparagraph (C). (2) That continued or resumed service or participation by the subject person or former subject person may pose a threat to the interests of the members of the subject institution or may threaten to impair public confidence in the subject institution. (b) An order issued pursuant to subdivision (a) shall remain in effect until the indictment or the information, complaint, or similar pleading is finally disposed of or, if the order is earlier terminated by the commissioner, until the order is so terminated. (c) If the commissioner finds that the factors set forth in paragraphs (1) and (2) are true with respect to a subject person or former subject person of a subject institution, the commissioner may, without any prior notice or hearing, issue an order suspending or removing the subject person or former subject person from his or her office, if any, with the subject institution and prohibiting him or her from further participating in any manner in the conduct of the affairs of the subject institution without the approval of the commissioner: (1) That the subject person or former subject person has been finally convicted of any crime of the type described in paragraph (1) of subdivision (a). For purposes of this paragraph, an agreement to enter a pretrial diversion or similar program is deemed to be a conviction. (2) That continued or resumed service or participation by the subject person or former subject person may pose a threat to the interests of the members of the subject institution or may threaten to impair public confidence in the subject institution. (d) (1) (A) Within 30 days after an order is issued pursuant to subdivision (a) or (c), any subject person or former subject person of a subject institution to whom the order is issued may file with the commissioner an application for a hearing on the order. (B) If the commissioner fails to commence the hearing within 15 business days after the application is filed with the commissioner or within any longer period to which the subject person or former subject person consents, the order shall be deemed rescinded. (C) Within 30 days after the hearing or within any longer period to which the subject person or former subject person consents, the commissioner shall affirm, modify, or rescind the order. If the commissioner fails to affirm, modify, or rescind the order within this time limit, the order shall be deemed rescinded. (2) The right of any subject person or former subject person of a subject institution to whom an order is issued pursuant to subdivision (a) or (c) to petition for judicial review of the order shall not be affected by the failure of the person to apply to the commissioner for a hearing on the order pursuant to paragraph (1). (e) The fact that any subject person of a subject institution charged with a crime of the type described in paragraph (1) of subdivision (a) is not finally convicted of the crime does not preclude the commissioner from issuing an order regarding the subject person pursuant to any other section of this division. (Added by Stats. 2002, Ch. 734, Sec. 32. Effective September 20, 2002.) - 14311. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
Certain institutions and related persons may ask the commissioner to modify or rescind an order, and they still keep the right to seek judicial review.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14311. (a) Any subject institution, subject person of a subject institution, or former subject person of a subject institution to whom an order is issued under Sections 14308 to 14310, inclusive, may apply to the commissioner to modify or rescind the order. In deciding the application, the commissioner shall consider whether it is in the public interest to modify or rescind the order and whether it is reasonable to believe that the subject person or former subject person will, if and when he or she becomes a subject person of a subject institution, comply with all applicable provisions of this division and of any regulation or order issued under this division. (b) The right of any subject institution, subject person of a subject institution, or former subject person of a subject institution to whom an order is issued under Sections 14308 to 14310, inclusive, to petition for judicial review of the order shall not be affected by the failure of the subject institution, subject person, or former subject person to apply to the commissioner pursuant to subdivision (a) to modify or rescind the order. (Added by Stats. 2002, Ch. 734, Sec. 33. Effective September 20, 2002.) - 14312. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
A subject person or former subject person under certain orders may not do listed acts involving a subject depository institution unless the commissioner approves.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14312. (a) For purposes of this section, “subject depository institution” means any of the following: (1) A credit union that is organized under the laws of this state or that maintains an office in this state. (2) An affiliate of an institution specified in paragraph (1). (b) It shall be unlawful for a subject person or former subject person of a subject institution to whom an order is issued under Sections 14308 to 14310, inclusive, willfully to do, directly or indirectly, any of the following without the approval of the commissioner so long as the order is in effect: (1) To act as a subject person of any subject depository institution. (2) To vote any shares or other securities having voting rights for the election of any person as a director of a subject depository institution. (3) To solicit, procure, transfer or attempt to transfer, or vote any proxy, consent, or authorization with respect to any shares or other securities of a subject depository institution having voting rights. (4) To otherwise participate in any manner in the conduct of the affairs of any subject depository institution. (Added by Stats. 2002, Ch. 734, Sec. 34. Effective September 20, 2002.) - 14313. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
The commissioner may, without prior notice or hearing, take possession of a California credit union’s property and business if specified risk factors are found.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14313. If the commissioner finds that any of the factors set forth in subdivisions (a) to (g), inclusive, are true with respect to a California credit union, the commissioner may by order, without any prior notice or hearing, take possession of the property and business of the California credit union: (a) That the California credit union has violated any provision of this division, of another applicable law, of any order issued under this division, or of any written agreement with the commissioner, or has committed a material violation of any regulation of the commissioner. (b) That the California credit union is conducting its business in an unsafe or unsound manner. (c) That the California credit union is in such condition that it is unsafe or unsound for it to transact credit union business. (d) That the California credit union has inadequate net worth or is insolvent. The net worth of the credit union shall be considered inadequate if it is less than 2 percent of the credit union’s total assets. (e) That the California credit union failed to pay any of its obligations as they came due or is reasonably expected to be unable to pay its obligations as they come due. (f) That the California credit union has ceased to transact credit union business. (g) That the California credit union has, with the approval of its board, requested the commissioner to take possession of its property and business. (Amended by Stats. 2010, Ch. 532, Sec. 48. (AB 1268) Effective January 1, 2011.) - 14314. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
If the commissioner takes possession of a California credit union’s property and business under Section 14313, the credit union may ask the superior court within 10 days to stop further proceedings.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14314. (a) If the commissioner takes possession of the property and business of a California credit union pursuant to Section 14313, the California credit union may, within 10 days, apply to the superior court in the county where its principal executive office is located to enjoin further proceedings. The court may, after citing the commissioner to show cause why further proceedings should not be enjoined and after a hearing, dismiss the application or enjoin the commissioner from further proceedings and order the commissioner to surrender the property and business of the California credit union to the California credit union or make any further order as may be just. The judgment of the court may be appealed by the commissioner or by the California credit union in the manner provided by law for appeals from the judgment of a superior court. (b) At any time after the commissioner takes possession of the property and business of a California credit union pursuant to Section 14313, the California credit union may, with the approval of the commissioner, resume business upon conditions as the commissioner may prescribe. (Added by Stats. 2002, Ch. 734, Sec. 36. Effective September 20, 2002.) - 14315. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
The commissioner may liquidate a credit union after taking possession of its business and assets, and may instead appoint a liquidating agent or committee. The commissioner must file a commencement certificate and countersign certain certificates when liquidation is involuntary.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14315. (a) On taking possession of the business and assets of any credit union as provided in this chapter, the commissioner may proceed to liquidate the credit union in the manner provided by Chapter 7 (commencing with Section 600) of Division 1, and the provisions of that chapter, except Sections 700, 701, 702, and 710, shall apply as if the California credit union were a California state commercial bank, or he or she may appoint a liquidating agent or a liquidating committee of three members of the credit union to liquidate the business and assets of the credit union in the manner provided in Article 2 (commencing with Section 15250) of Chapter 9, except that in lieu of the certificate required under Section 15252 the commissioner shall prepare and file in the office of the Secretary of State a certificate of commencement of liquidation proceedings upon taking possession of the business and assets, and the commissioner or his authorized deputy shall countersign the certificate referred to in Sections 15257 and 15258 whenever liquidation is involuntary. The commissioner may, however, prepare and file a final certificate whenever he or she retains possession of the assets of any credit union for the purpose of liquidation. The liquidating agent need not be a member of the credit union to be liquidated, and may be a person, firm, or corporation as determined by the commissioner. (b) If the commissioner takes possession of the property and business of a California credit union pursuant to Section 14313, the commissioner may tender to the National Credit Union Administration an appointment as conservator or receiver of the California credit union. If the National Credit Union Administration accepts the appointment, the National Credit Union Administration shall have, in addition to any powers conferred by federal law, the powers conferred on the commissioner pursuant to subdivision (a). (Amended by Stats. 2011, Ch. 243, Sec. 15. (SB 664) Effective January 1, 2012.) - 14316. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
The commissioner must supervise the liquidating agent or liquidating committee, and may remove them at the commissioner’s discretion.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14316. The commissioner shall supervise the acts of the liquidating agent or the liquidating committee appointed under this article and may remove the liquidating agent or any member of the liquidating committee in his or her discretion. (Added by Stats. 2002, Ch. 734, Sec. 38. Effective September 20, 2002.) - 14317. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
If the commissioner requires it, the liquidating agent or liquidating committee members must provide proof of bond coverage, and the bond premium must be paid from the credit union’s assets.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14317. If required by the commissioner, the liquidating agent or the members of the liquidating committee appointed under this article shall provide proof of bond coverage extending to the liquidating agent or members of the liquidating committee. The bond shall include coverage for fraud, dishonesty, and faithful performance. The premium for that bond shall be paid out of the assets of the credit union. (Added by Stats. 2002, Ch. 734, Sec. 39. Effective September 20, 2002.) - 14318. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
If the commissioner keeps a credit union’s assets for liquidation, the commissioner must use civil service employees from the commissioner’s office, and may request legal services from attorneys employed by the commissioner or the Department of Justice.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14318. If the commissioner retains possession of the assets of a credit union for purposes of liquidation, the commissioner shall use the services of civil service employees of the commissioner’s office and the attorneys employed by the commissioner or the Department of Justice shall render all necessary legal services, as the commissioner may request. (Added by Stats. 2002, Ch. 734, Sec. 40. Effective September 20, 2002.) - 14319. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. )
If the commissioner acts without prior notice or hearing, the commissioner must give the affected institution or person a written order at the same time and state the basis for the action.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Enforcement [14300 - 14319] ( Heading of Article 3 amended by Stats. 2002, Ch. 734, Sec. 16. ) ## 14319. In any case where the commissioner takes possession of a subject institution pursuant to this article without a prior notice or hearing, or takes action against a subject person without prior notice or hearing, the commissioner shall, upon taking possession or taking the action, concurrently provide to the subject institution or person a written order. The order shall set forth the condition or conditions of the subject institution or action or actions of the subject person that constitute the basis or bases for the commissioner’s action as to the subject institution or subject person. In any case where the commissioner takes possession of a subject institution pursuant to this article, the commissioner shall establish clear evidence upon which he or she is taking action against the subject institution. (Added by Stats. 2002, Ch. 734, Sec. 41. Effective September 20, 2002.) - 14350. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. )
The commissioner must annually levy and collect an assessment from eligible credit unions, based on total assets.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14350. The commissioner shall annually levy on and collect from credit unions holding certificates authorizing them to act as credit unions, pro rata on the basis of total assets, an assessment in a total amount that is sufficient in the commissioner’s opinion to (a) meet the expenses of the department in administering this division and other laws relating to credit unions or the credit union business that are not otherwise provided for and (b) provide a reasonable reserve for contingencies. (Repealed (Jan. 1, 1999) and added by Stats. 1998, Ch. 539, Sec. 9. Effective January 1, 1999. Adding action operative July 1, 1999, by Sec. 47 of Ch. 539.) - 14351. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. )
Credit unions with a certificate must pay an annual assessment of at least $2,000, and the amount can also be calculated from total assets and the commissioner-set base assessment rate.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14351. (a) The amount of the annual assessment on any credit union holding a certificate authorizing it to act as a credit union shall be the greater of (1) two thousand dollars ($2,000) or (2) the sum of the products determined by multiplying (A) increments of the credit union’s total assets by (B) percentages of the base assessment rate, according to the following table: Percentage of Base Assessment Rate Total Assets $0–$3,000,000 85.0% $3,000,000–$6,000,000 25.0% $6,000,000–$10,000,000 13.0% $10,000,000–$100,000,000 12.5% $100,000,000–$500,000,000 12.25% $500,000,000–$1,000,000,000 12.0% $1,000,000,000–$2,000,000,000 11.5% $2,000,000,000–$5,000,000,000 8.0% $5,000,000,000–$10,000,000,000 3.5% Excess over $10,000,000,000 3.0% (b) The base assessment rate for each annual assessment shall be fixed by the commissioner but shall not exceed two dollars and twenty cents ($2.20) per one thousand dollars ($1,000) of total assets. (Amended by Stats. 2013, Ch. 115, Sec. 1. (AB 1282) Effective January 1, 2014.) - 14352. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. )
For the annual assessment, a credit union’s total assets are valued on a date set by the commissioner, unless the credit union lacks the required certificate on that date but has it when the assessment is levied; then assets are valued on the levy date.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14352. For purposes of the annual assessment, the total assets of a credit union holding a certificate authorizing it to act as a credit union shall be determined as of a date fixed by the commissioner. However, if a credit union does not hold a certificate authorizing it to act as a credit union as of that date but does so as of the date when the annual assessment is levied, its total assets for purposes of the annual assessment shall be determined as of the date of the levy. (Repealed (Jan. 1, 1999) and added by Stats. 1998, Ch. 539, Sec. 13. Effective January 1, 1999. Adding action operative July 1, 1999, by Sec. 47 of Ch. 539.) - 14353. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. )
The commissioner must promptly send each assessed credit union an invoice showing the annual assessment amount and due date, and may collect a 5% monthly penalty if payment is late.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14353. (a) Whenever the commissioner levies an annual assessment on credit unions holding certificates authorizing them to act as credit unions, the commissioner shall promptly mail or otherwise deliver to each credit union assessed an invoice that shows (1) the amount of the credit union’s annual assessment and (2) the date when the annual assessment is due and payable. (b) The annual assessment on a credit union holding a certificate authorizing it to act as a credit union becomes a liability of the credit union on the date on which the commissioner levies the annual assessment. (c) If the annual assessment on a credit union holding a certificate authorizing it to act as a credit union is not paid on time, the commissioner shall be entitled to and may collect, in addition to the amount of the annual assessment, a penalty of 5 percent of the amount of the unpaid annual assessment for each month or part of a month that the payment is delinquent. (Repealed (Jan. 1, 1999) and added by Stats. 1998, Ch. 539, Sec. 15. Effective January 1, 1999. Adding action operative July 1, 1999, by Sec. 47 of Ch. 539.) - 14353.5. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. )
If the commissioner decides an extra credit union examination is needed, the commissioner may charge a fee, and the credit union must pay it within 10 days after the commissioner sends or delivers a statement.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14353.5. Whenever the commissioner finds it necessary or advisable to make an extra examination of a credit union, the commissioner may charge the credit union a fee for the examination. In determining the fee, the commissioner may use the estimated average hourly cost, including, but not limited to, overhead, for each examiner engaged in the extra examination, and the credit union shall, within 10 days after the mailing or other delivery of a statement by the commissioner, pay the fee charged by the commissioner. (Amended by Stats. 2025, Ch. 20, Sec. 12. (AB 137) Effective June 30, 2025.) - 14354. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. )
The Credit Union Fund is established in the State Treasury.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14354. There is established the Credit Union Fund in the State Treasury. (Amended by Stats. 2003, Ch. 404, Sec. 17. Effective January 1, 2004.) - 14355. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. )
The commissioner must pay money received or collected under this credit union law into the State Treasury for the Credit Union Fund at least once each week, and the payment must include a detailed statement.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14355. All money received or collected by the commissioner under this division or any other law relating to credit unions or the credit union business shall be paid at least once each week, accompanied by a detailed statement thereof, into the State Treasury to the credit of the Credit Union Fund. (Added by renumbering Section 14354 (as amended by Stats. 1992, Ch. 427) by Stats. 1996, Ch. 1064, Sec. 575. Effective January 1, 1997. Operative July 1, 1997.) - 14356. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. )
Department administration expenses for credit unions must be paid from the Credit Union Fund, and the fund is limited to that use except where Section 413 or 414 says otherwise.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Costs of Administration [14350 - 14356] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14356. All expenses of the department in administering this division and other laws relating to credit unions or the credit union business shall be paid out of the Credit Union Fund; and, except as otherwise provided in Section 413 or 414, the Credit Union Fund shall be used only for such purposes. (Amended by Stats. 2014, Ch. 64, Sec. 17. (AB 2742) Effective January 1, 2015.) - 14380. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Union Advisory Committee [14380 - 14384] ( Article 5 added by Stats. 1996, Ch. 1064, Sec. 577. )
A Credit Union Advisory Committee is established in the department.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Union Advisory Committee [14380 - 14384] ( Article 5 added by Stats. 1996, Ch. 1064, Sec. 577. ) ## 14380. There is established in the department a Credit Union Advisory Committee. (Added by Stats. 1996, Ch. 1064, Sec. 577. Effective January 1, 1997. Operative July 1, 1997.) - 14381. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Union Advisory Committee [14380 - 14384] ( Article 5 added by Stats. 1996, Ch. 1064, Sec. 577. )
The Credit Union Advisory Committee must advise the commissioner and the Deputy Commissioner of Financial Protection and Innovation for the Office of Credit Unions on credit union matters.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Union Advisory Committee [14380 - 14384] ( Article 5 added by Stats. 1996, Ch. 1064, Sec. 577. ) ## 14381. The Credit Union Advisory Committee shall advise the commissioner and the Deputy Commissioner of Financial Protection and Innovation for the Office of Credit Unions on matters relating to credit unions or the credit union business. (Amended by Stats. 2022, Ch. 452, Sec. 117. (SB 1498) Effective January 1, 2023.) - 14382. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Union Advisory Committee [14380 - 14384] ( Article 5 added by Stats. 1996, Ch. 1064, Sec. 577. )
The Credit Union Advisory Committee has seven members, appointed by the Secretary of Business and Consumer Services. Members serve two-year terms, may be reappointed, may resign, and do not receive state compensation or reimbursement for service.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Union Advisory Committee [14380 - 14384] ( Article 5 added by Stats. 1996, Ch. 1064, Sec. 577. ) ## 14382. (a) The Credit Union Advisory Committee consists of seven members. (b) The members of the Credit Union Advisory Committee shall be appointed by the Secretary of Business and Consumer Services. (c) The term of a member of the Credit Union Advisory Committee is two years. However, a member may be reappointed. (d) Membership in the Credit Union Advisory Committee is voluntary. No person is required to accept an appointment to the Credit Union Advisory Committee, and any member may resign by filing a resignation with the commissioner. (e) No member of the Credit Union Advisory Committee shall receive any compensation, reimbursement for expenses, or other payment from the state in connection with service on the Credit Union Advisory Committee. (f) The amendments made to this section by the act adding this subdivision shall become operative on July 1, 2026. (Amended by Stats. 2026, Ch. 28, Sec. 17. (SB 170) Effective June 29, 2026. Operative July 1, 2026, by its own provisions.) - 14383. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Union Advisory Committee [14380 - 14384] ( Article 5 added by Stats. 1996, Ch. 1064, Sec. 577. )
The Credit Union Advisory Committee must meet at least once each calendar quarter.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Union Advisory Committee [14380 - 14384] ( Article 5 added by Stats. 1996, Ch. 1064, Sec. 577. ) ## 14383. The Credit Union Advisory Committee shall meet at least once each calendar quarter. (Added by Stats. 1996, Ch. 1064, Sec. 577. Effective January 1, 1997. Operative July 1, 1997.) - 14384. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Union Advisory Committee [14380 - 14384] ( Article 5 added by Stats. 1996, Ch. 1064, Sec. 577. )
The commissioner may issue orders or regulations setting rules for the Credit Union Advisory Committee and its members.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Union Advisory Committee [14380 - 14384] ( Article 5 added by Stats. 1996, Ch. 1064, Sec. 577. ) ## 14384. The commissioner may by order or regulation prescribe rules governing the Credit Union Advisory Committee and its members, including such matters as meetings, quorum, and actions. (Added by Stats. 1996, Ch. 1064, Sec. 577. Effective January 1, 1997. Operative July 1, 1997.) - 1440. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Dormant Accounts [1440- 1440.] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A bank that turns over an unclaimed or abandoned deposit to the State Treasurer is no longer liable to anyone for that money, and the Attorney General must defend any related lawsuit at no cost to the bank.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Dormant Accounts [1440- 1440.] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1440. Any bank which delivers or has heretofore delivered to the State Treasurer pursuant to law any unclaimed or abandoned deposit shall not thereafter be liable to any person for the same and any action which may be brought by any person against a bank for money so delivered to the State Treasurer shall be defended by the Attorney General without cost to the bank. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 14400. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union’s equity capital includes specified reserve and earnings accounts plus other capital approved by the commissioner; savings capital consists of members’ payments on shares.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14400. (a) The equity capital of the credit union shall consist of the credit union’s regular reserve account, the undivided earnings account, any appropriated undivided earnings accounts, and other forms of capital approved by the commissioner. (b) The savings capital of a credit union shall consist of the payments made by members on shares. (Amended by Stats. 2024, Ch. 305, Sec. 1. (AB 2062) Effective January 1, 2025.) - 14401. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may borrow money from any source, but its aggregate borrowings must not exceed 50% of paid-in and unimpaired capital and surplus.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14401. A credit union may borrow money from any source in an aggregate amount not to exceed 50 percent of the paid-in and unimpaired capital and surplus of the credit union. Loans from the National Credit Union Central Liquidity Facility (12 U.S.C. Sec. 1795 et seq.) shall not be included in computing the aggregate borrowings of a credit union. For the purposes of this division, “certificate for funds” means borrowed money. (Amended by Stats. 2004, Ch. 183, Sec. 107. Effective January 1, 2005.) - 14402. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. )
Credit unions may buy and hold a lot and building for business use and future expansion, lease unused space to the public, and sell the property if all holders join in the sale.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14402. Every credit union may purchase and hold, either individually or jointly with other credit unions or affiliated organizations, a lot and building to be employed principally for the transaction of business, and to provide for future expansion of the facilities of those organizations. Any excess space that is not occupied by the organizations purchasing and holding the building may be leased to the public. The lot and building may be sold if all the holders of the property join in its sale. (Amended by Stats. 2006, Ch. 538, Sec. 172. Effective January 1, 2007.) - 14403. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may buy and hold certain personal property needed for its business, alone or with others, and that property may be sold if all holders join in the sale.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14403. Every credit union may purchase and hold, either individually or jointly with other credit unions or affiliated organizations, furniture, fixtures, vaults, and other personal property necessary or proper to carry on its business, and to equip or furnish any space in any building purchased or held individually or jointly with other credit unions or affiliated organizations under authorization of Section 14402, whether occupied by the credit union or leased to the public. The personal property may be sold, if all the holders of the property join in its sale. (Amended by Stats. 1979, Ch. 811.) - 14404. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may not invest above the amounts allowed by regulations issued by the commissioner.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14404. A credit union shall not invest more than the amounts permitted pursuant to regulations which shall be promulgated by the commissioner for the investments set forth in Sections 14402, 14403, 14650 and 14651. (Repealed and added by Stats. 1983, Ch. 743, Sec. 2. Operative July 1, 1984, by Sec. 11 of Ch. 743.) - 14405. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. )
Every credit union may join certain organizations, including nonprofit organizations approved by its board of directors, and may pay dues and assessments charged by organizations it belongs to.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14405. Every credit union may: (a) (1) Become a member of any organization or organizations composed of credit unions, credit associations, chambers of commerce, financial institutions, community economic development entities, or business or trade organizations. (2) Become a member of any nonprofit organization approved by the board of directors. (b) Pay dues and assessments as may be levied upon it by any organization of which it is a member. (Amended by Stats. 2007, Ch. 148, Sec. 2. Effective January 1, 2008.) - 14406. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may deposit its savings capital, undivided profits, and reserve funds only in specified depository or share/investment accounts.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14406. The savings capital, as defined in Section 14400, undivided profits, and reserve funds of a credit union shall be deposited only in the following: (a) Commercial banks or trust companies, incorporated under the laws of this state. (b) National banks doing business in this state. (c) Shares or periodic certificates for funds received by or any form of evidence of interest or indebtedness issued by any credit union organized under this division or by any other credit union if its member accounts are insured as provided for by Subchapter II of the Federal Credit Union Act (12 U.S.C. Sec. 1781 et seq.), or, alternatively, are insured by other means determined acceptable by the commissioner. (d) Accounts with, investment certificates or withdrawable shares of, any savings and loan association doing business in this state that is an insured institution pursuant to the Federal Deposit Insurance Corporation Act (12 U.S.C. Sec. 1811 et seq.). (Amended by Stats. 2024, Ch. 305, Sec. 2. (AB 2062) Effective January 1, 2025.) - 14407. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may reduce shareholder liability when losses exceed its earnings and reserve fund, if members approve; the commissioner may also approve some reductions with less than majority member approval if notice and voting requirements are met.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14407. (a) Whenever the losses of any credit union resulting from a depreciation in the value of its securities or otherwise exceed its undivided earnings and reserve fund so that the estimated value of its assets is less than the total amount due its shareholders, the credit union may, if approved by a majority of all members at a meeting called to consider the matter, order a reduction of the liability to each of its shareholders, so as to divide the loss equitably among the shareholders. If thereafter the credit union realizes from its assets a greater amount than was fixed in the order of reduction, the excess shall be divided among the shareholders whose assets were reduced, but to the extent of the reduction only. (b) The commissioner may approve a reduction in the liability on shares approved by less than a majority of all members as provided in subdivision (a) if the commissioner finds, upon the written and verified application filed by the board of directors, that (1) notice of the meeting called to consider the question was mailed to each member entitled to vote upon the question, (2) the notice disclosed the purpose of the meeting and properly informed the membership that approval of the reduction in liability might be sought pursuant to this subdivision, and (3) that a majority of the votes cast upon the question were in favor of the reduction in liability. (Amended by Stats. 1998, Ch. 539, Sec. 18. Effective January 1, 1999.) - 14408. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union generally cannot make a gift or donation over $25,000 unless it is in the credit union’s best interest, approved by the board, and consistent with any commissioner regulation or order.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14408. No credit union shall make any gift or donation having a value in excess of twenty-five thousand dollars ($25,000) unless the gift or donation is in the best interest of the credit union, is approved by a resolution of the board of directors and is in conformance with any regulation or order that the commissioner may issue. The resolution of the board of directors approving the gift or donation shall identify the recipient of the gift or donation, state the value of the gift or donation, and specify the basis for the board’s determination that the gift or donation is in the best interests of the credit union. The board may establish a budget for gifts and donations and authorize appropriate officials of the credit union to select recipients and disburse budgeted funds among those recipients. (Amended by Stats. 2007, Ch. 148, Sec. 3. Effective January 1, 2008.) - 14409. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. )
Credit unions must obtain adequate bond or insurance coverage for specified directors, committee members, the credit manager, and each employee. The commissioner may issue regulations on what counts as adequate coverage.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14409. (a) Every credit union shall obtain adequate bond or insurance coverage, for each director, officer, supervisory committee member, audit committee member, and credit committee member, for the credit manager, and for each employee. (b) The commissioner may adopt regulations setting forth guidelines with respect to the minimum amount of the bond or insurance coverage deemed adequate. The regulations may be based upon the gross assets of the credit union and may contain a formula or schedule for the calculation of minimum bond or insurance coverage. (Amended by Stats. 2021, Ch. 762, Sec. 2. (SB 269) Effective January 1, 2022.) - 14409.2. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. )
Credit unions may send applicant fingerprints to law enforcement for a criminal-record check, but a records request needs the applicant’s written consent and the resulting criminal history information must stay confidential.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14409.2. (a) Notwithstanding the provisions of Sections 1051, 1052, and 1054 of the Labor Code and Section 2947 of the Penal Code, any credit union or officer or employee thereof may deliver fingerprints taken of an applicant for employment by the credit union to local, state, or federal law enforcement agencies for the purpose of obtaining information as to the existence and nature of a criminal record, if any, of the applicant relating to convictions, and to any arrest for which the applicant is released on bail or on his or her own recognizance pending trial, for the commission or attempted commission of a crime involving robbery, burglary, theft, embezzlement, fraud, forgery, bookmaking, receiving stolen property, counterfeiting, or involving checks or credit cards or using computers. (b) The Department of Justice shall, pursuant to Section 11105 of the Penal Code, and a local agency may, pursuant to Section 13300 of the Penal Code, furnish to the officer of the credit union responsible for the final decision regarding employment of the applicant, or to his or her designees having responsibilities for personnel or security decisions in the usual scope and course of their employment with the credit union, summary criminal history information when requested pursuant to this section. If, upon evaluation of the criminal history information received pursuant to this section, the credit union determines that employment of the applicant would constitute an unreasonable risk to the credit union or its customers, the applicant may be denied employment. (c) A request for records pursuant to this section made of the Department of Justice shall be on a form approved by the department. The department may charge a fee to be paid by the requesting credit union pursuant to subdivision (e) of Section 11105 of the Penal Code. No request shall be submitted without the written consent of the applicant. (d) Any criminal history information obtained pursuant to this section is confidential and no recipient shall disclose its contents other than for the purpose for which it was acquired. (Amended by Stats. 1982, Ch. 1203, Sec. 13. Effective September 22, 1982. Operative January 1, 1983, by Sec. 20 of Ch. 1203.) - 14410. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. )
Board and committee members may not be paid for their service, but limited insurance, approved incidental noncash compensation, and expense reimbursement are allowed. Employee compensation for actual services is still allowed.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14400 - 14410] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14410. (a) (1) A member of the board of directors, supervisory committee, audit committee, or credit committee shall not receive compensation for that member’s services as a member of the board of directors, supervisory committee, audit committee, or credit committee, but the member may be provided with reasonable health, accident, and similar insurance. (2) This subdivision does not prohibit a member of the board of directors, supervisory committee, audit committee, or credit committee from receiving nonmonetary compensation that is incidental to the person’s service as a member of the board of directors, supervisory committee, audit committee, or credit committee, if and as approved by regulation or order of the commissioner. (b) Notwithstanding subdivision (a), a director or committee member may be reimbursed for actual expenses incurred in the performance of that person’s duties if reimbursement is made pursuant to the requirements of the commissioner’s regulations controlling expense reimbursement by the credit union. Reimbursement for actual expenses may include, among other things, travel expenses incurred on or relating to credit union businesses and any other matters, categories, or items of expense that the commissioner establishes by regulation. (c) This section shall not prevent any person from receiving compensation for actual services as a general manager, credit manager, loan officer, or other position as an employee of the credit union. (Amended by Stats. 2021, Ch. 762, Sec. 3. (SB 269) Effective January 1, 2022.) - 14450. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. )
The credit union must be run by a board with an odd number of directors, at least five, and each director must be a credit union member elected at the annual meeting.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14450. The credit union shall be directed by a board consisting of an odd number of directors, at least five in number, each of whom shall be a member of the credit union in his own right, to be elected by the members at their annual meeting. (Amended by Stats. 1979, Ch. 811.) - 14451. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. )
Directors may be elected for terms of three years or less, and if terms exceed one year, the terms must be staggered so roughly equal numbers expire each year.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14451. Directors may be elected for a term of three years or less. If directors are elected for terms in excess of one year their terms of office shall be staggered so that insofar as possible an equal number of such terms shall expire each year. (Repealed and added by Stats. 1979, Ch. 112.) - 14452. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. )
A director’s office is declared vacant if the director misses three consecutive regular board meetings, unless excused.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14452. The office of any director shall be declared vacant if such director is absent from three consecutive regular meetings of the board of directors unless excused therefrom. (Repealed and added by Stats. 1979, Ch. 112.) - 14452.5. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. )
Board vacancies must be filled under Corporations Code Section 7224, with special rules for vacancies caused by a director’s term ending.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14452.5. A vacancy on the board of directors shall be filled in accordance with Section 7224 of the Corporations Code, subject to the following: (a) A vacancy that exists due to the expiration of the term of a director shall be filled only by the members of a credit union. (b) If the board of directors elects a director to fill a vacancy, the director so elected shall hold office only until the next annual meeting at which time the members shall elect a director to hold office until the expiration of the term for which elected. (c) If the members elect a director to fill a vacancy, the director so elected shall hold office until the expiration of the term for which elected. (Added by Stats. 1998, Ch. 539, Sec. 22. Effective January 1, 1999.) - 14453. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. )
The board of directors of every credit union manages the credit union’s affairs, funds, and records, must meet at least quarterly, and may appoint an executive committee of at least three directors.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14453. The board of directors of every credit union shall have the general management of the affairs, funds, and records of the credit union. The board shall meet on a regular basis, not less than quarterly, as reasonably determined by the board. The board may appoint an executive committee of no fewer than three directors, to serve at its pleasure, to act as expressly approved by the board of directors in accordance with the laws and regulations. (Amended by Stats. 2016, Ch. 353, Sec. 3. (AB 2274) Effective January 1, 2017.) - 14454. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. )
Directors must hold a meeting of all directors within 10 days after the members’ annual meeting.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14454. The directors shall hold a meeting of all directors within 10 days after the annual meeting of members pursuant to Section 14804 for the purpose of electing the officers of the credit union as prescribed in Sections 14500 and 14501. (Amended by Stats. 1985, Ch. 951, Sec. 4.) - 14456. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. )
Directors of a credit union have many listed duties, and may delegate some of them under written plans. The section also gives expelled members a right to appeal and requires notice and review steps in some membership decisions.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Directors [14450 - 14456] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14456. Unless the bylaws expressly reserve any or all of the following duties to the members, the directors have all of the following special duties: (a) (1) To act upon all applications for membership. The directors may delegate the power to approve applications for new membership to either of the following, pursuant to a written membership plan adopted by the board of directors: (A) The chairperson of a membership committee or an executive committee. (B) An officer, director, committee member, or employee. (2) The directors or their delegates may utilize an automated system to establish membership eligibility pursuant to a written membership plan adopted by the board of directors if all of the following conditions are met: (A) The automated system is regularly tested for compliance with Section 14800, the credit union’s field of membership, and applicable laws and regulations. (B) An application for new membership approved using an automated system is reviewed by the directors or their delegates within five business days to ensure compliance with subparagraph (A). (C) The written membership plan includes a plan to address an approved application determined not to be in compliance with subparagraph (A). (b) (1) To expel members for any of the following causes, subject to Section 14801: (A) Conviction of a criminal offense involving moral turpitude. (B) Failure to carry out contracts, agreements, or obligations with the credit union. (C) Refusal to comply with the provisions of this division or of the bylaws. (D) Abusive, threatening, or harassing behavior toward credit union staff, volunteers, or members, or the abuse of credit union systems or property. (2) The directors may delegate the power to expel members for cause to a membership committee or an executive committee, pursuant to a written membership plan adopted by the board of directors. (3) (A) An expulsion pursuant to subparagraph (D) of paragraph (1) may take effect immediately, without advance notice or an opportunity to be heard, if the board of directors, or its designee pursuant to subdivision (b), determines that immediate expulsion is reasonably necessary for the protection of the credit union or its staff, volunteers, or members. (B) A member expelled pursuant to subparagraph (A) shall be provided written notice within five business days after the effective date of that expulsion. (C) This paragraph shall not prohibit a member expelled pursuant to subparagraph (A) from appealing that expulsion pursuant to paragraph (4). (D) An expulsion pursuant to this paragraph shall be deemed to be fair and reasonable pursuant to Section 7341 of the Corporations Code. (4) (A) A member who is expelled by the board of directors, or its designee, has the right to appeal therefrom to the board of directors, pursuant to reasonable procedures adopted by the board. (B) For purposes of this paragraph, “reasonable procedures” shall include, but not be limited to, all of the following: (i) Written notice to the expelled member of the effective date of the expulsion. (ii) The right to appeal therefrom and the procedures for doing so. (iii) Written notice of the board’s final determination following an appeal. (c) To determine from time to time the interest rate on obligations with members and to authorize the payment of interest refunds to borrowing members. The board of directors may delegate this duty pursuant to subdivision (l). (d) To fix the maximum number of shares that may be held by, and, in accordance with Section 15100, establish the maximum amount of obligations which may be entered into with, any one member. (e) To declare dividends on shares in accordance with the credit union’s policies and to determine the interest rate or rates that will be paid on certificates for funds. The board of directors may delegate this duty pursuant to subdivision (l). (f) To amend the bylaws, except where membership approval is required. (g) To fill vacancies in the credit committee, and to temporarily fill vacancies caused by the suspension of any or all members of the credit committee, pending a meeting of the members to determine whether to affirm the suspension and vacate the office, or to reinstate the member or members. (h) To direct the deposit or investment of funds, except loans to members. (i) To designate alternate members of the credit committee who shall serve in the absence or inability of the regular members to perform their duties. (j) To perform or authorize any action not inconsistent with law or regulation and not specifically reserved by the bylaws for the members and to perform any other duties as the bylaws prescribe. (k) For purposes of this section, “membership committee” means a committee of at least three persons appointed by the board of directors, provided that the number of members on the committee is an odd number, each of whom shall be a member of the credit union. Notwithstanding any other law, a membership committee may be composed of directors, nondirectors, or both directors and nondirectors. No member of the supervisory committee or audit committee may serve on the membership committee. (l) (1) The board of directors may, by resolution, delegate the following to an asset-liability management committee or similar committee, consistent with the policies of the board of directors: (A) The duties set forth in subdivisions (c) and (e). (B) The authority to determine the dividend rates on share accounts pursuant to subdivision (b) of Section 14901. (2) The asset liability management committee or similar committee may be composed of directors, nondirector management officials, or both directors and nondirector management officials. (3) The asset liability management committee or similar committee shall provide a report to the board of directors, at least monthly, that specifies any actions taken. (Amended by Stats. 2024, Ch. 305, Sec. 3. (AB 2062) Effective January 1, 2025.) - 145. Verify source ↗
## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )
“Board” means the meaning given in Section 155 of the Corporations Code.
## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 145. “Board” has the meaning set forth in Section 155 of the Corporations Code. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.) - 1450. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 13. Withdrawals and Collections [1450 - 1456] ( Chapter 13 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General [1450 - 1452] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )
Banks must generally ignore notice of an adverse claim and continue honoring payments and delivery, unless the claimant provides a qualifying affidavit or a court order.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 13. Withdrawals and Collections [1450 - 1456] ( Chapter 13 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General [1450 - 1452] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1450. Notice to any bank of an adverse claim (the person making the adverse claim being hereafter called “adverse claimant”) to a deposit standing on its books to the credit of or to personal property held for the account of any person shall be disregarded, and the bank, notwithstanding the notice, shall honor the checks, notes, or other instruments requiring payment of money by or for the account of the person to whose credit the account stands and on demand shall deliver that property to, or on the order of, the person for whose account the property is held, without any liability on the part of the bank; subject, however, to the exceptions provided in subdivisions (a) and (b): (a) If an adverse claimant delivers to the bank at the office at which the deposit is carried or at which the property is held an affidavit of the adverse claimant stating that of the adverse claimant’s own knowledge the person to whose credit the deposit stands or for whose account the property is held is a fiduciary for the adverse claimant and that the adverse claimant has reason to believe the fiduciary is about to misappropriate the deposit or the property, and stating the facts on which the claim of fiduciary relationship and the belief are founded, the bank shall refuse payment of the deposit and shall refuse to deliver the property for a period of not more than three court days (including the day of delivery) from the date that the bank received the adverse claimant’s affidavit, without liability on its part and without liability for the sufficiency or truth of the facts alleged in the affidavit. (b) If at any time, either before, after, or in the absence of the filing of an affidavit by the adverse claimant, the adverse claimant procures and serves upon the bank at the office at which the deposit is carried or at which the property is held a restraining order, injunction, or other appropriate order against the bank from a court of competent jurisdiction in an action in which the adverse claimant and all persons in whose names the deposit stands or for whose account the property is held are parties, the bank shall comply with the order or injunction, without liability on its part. (c) This section shall be applicable even though the name of the person appearing on the bank’s books to whose credit the deposit stands or for whose account the property is held is modified by a qualifying or descriptive term such as “agent,” “trustee,” or other word or phrase indicating that the person may not be the owner in his or her own right of the deposit or property. (d) Nothing in the California Multiple-Party Accounts Law contained in Part 2 (commencing with Section 5100) of Division 5 of the Probate Code limits the applicability of this section. (e) For purposes of this section, the term “office at which the deposit is carried” shall mean the branch, office, or other location where the account containing the subject deposit is carried or maintained. (f) Notwithstanding subdivisions (a) and (b), if a central location has been designated by the bank pursuant Section 684.115 of the Code of Civil Procedure for service of legal process, as that term is defined in Section 684.110 of the Code of Civil Procedure, the adverse claimant shall serve a notice of adverse claim or related affidavit, order, injunction, or other order contemplated herein at the central location. If a central location has not but should have been designated by the bank pursuant Section 684.115 of the Code of Civil Procedure for service of legal process, as that term is defined in Section 684.110 of the Code of Civil Procedure, the adverse claimant may serve a notice of adverse claim or related affidavit, order, injunction, or other order contemplated herein at any branch or office of the institution located in this state. (Amended by Stats. 2012, Ch. 484, Sec. 13. (AB 2364) Effective January 1, 2013.) - 14500. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Officers [14500 - 14502] ( Article 3 added by Stats. 1979, Ch. 112. )
Every credit union must have specified officers, and it may add other officers under its bylaws or board resolution.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Officers [14500 - 14502] ( Article 3 added by Stats. 1979, Ch. 112. ) ## 14500. (a) The officers of every credit union shall include a chairman or president, one or more vice chairmen or vice presidents, a secretary and a treasurer or chief financial officer. (b) The officers of any credit union may include other officers with titles and duties specified in the bylaws or determined by resolution of the board as may be necessary for the conduct of its affairs. The president, or if there is no president, the chairman of the board, is the general manager and chief executive officer of the credit union, unless otherwise provided in the bylaws. (c) Except as otherwise provided in a credit union’s bylaws, officers, other than those officers elected pursuant to Section 14454 and required pursuant to subdivision (a), shall be chosen by the board and serve at the pleasure of the board, subject to the rights, if any, of an officer under any contract of employment. Any officer may resign at any time upon written notice to the corporation without prejudice to the rights, if any, of the corporation under any contract or obligation with the credit union to which the officer is a party. An officer other than those officers required pursuant to subdivision (a), may, but need not be, a director of the credit union. (Amended by Stats. 1985, Ch. 951, Sec. 6.) - 14501. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Officers [14500 - 14502] ( Article 3 added by Stats. 1979, Ch. 112. )
If the bylaws allow it, the directors may elect one person to serve as both secretary and treasurer or as chief financial officer.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Officers [14500 - 14502] ( Article 3 added by Stats. 1979, Ch. 112. ) ## 14501. If the bylaws so provide, the directors may elect the same person as secretary and treasurer or chief financial officer. (Amended by Stats. 1985, Ch. 951, Sec. 7.) - 14502. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Officers [14500 - 14502] ( Article 3 added by Stats. 1979, Ch. 112. )
The powers and duties of certain credit union officers are set by the bylaws.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 3. Officers [14500 - 14502] ( Article 3 added by Stats. 1979, Ch. 112. ) ## 14502. The powers and duties of the officers of any credit union required pursuant to subdivision (a) of Section 14500 are as prescribed in the bylaws. (Amended by Stats. 1985, Ch. 951, Sec. 8.) - 1451. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 13. Withdrawals and Collections [1450 - 1456] ( Chapter 13 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General [1450 - 1452] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )
A bank may treat withdrawals made by an authorized person as authorized unless it has written notice otherwise.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 13. Withdrawals and Collections [1450 - 1456] ( Chapter 13 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General [1450 - 1452] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1451. When the depositor of a commercial or savings account has authorized any person to make withdrawals from the account, the bank, in the absence of written notice otherwise, may assume that any check, receipt, or order of withdrawal drawn by such person in the authorized form or manner, including checks drawn to his personal order and withdrawal orders payable to him personally, was drawn for a purpose authorized by the depositor and within the scope of the authority conferred upon such person. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1452. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 13. Withdrawals and Collections [1450 - 1456] ( Chapter 13 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General [1450 - 1452] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )
A bank may refuse to recognize certain claims or cancellation notices about deposits or account authority linked to corporations, firms, or associations in occupied territory, unless a U.S. court order requires otherwise or an acceptable indemnity bond is provided.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 13. Withdrawals and Collections [1450 - 1456] ( Chapter 13 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General [1450 - 1452] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1452. A bank need not recognize or give any effect to (1) any claim to a deposit of cash or securities standing on its books to the credit of, or held by it for the account of, any corporation, firm or association in occupied territory or (2) any advice, statute, rule or regulation purporting to cancel or to give notice of the cancellation of the authority of any person at the time appearing on the books of such bank as authorized to withdraw or otherwise dispose of cash or securities of such corporation, firm or association, unless such bank is required so to do by appropriate process procured against it in a court of competent jurisdiction in the United States in a cause therein instituted by or in the name of such corporation, firm or association, or unless the person making such claim or giving such advice or invoking such statute, rule or regulation, as the case may be, shall execute to such bank, in form and with sureties acceptable to it, a bond indemnifying it from any and all liability, loss, damage, costs and expenses for and on account of recognizing or giving any effect to such claim, advice, statute, rule or regulation. For the purposes of this section (1) the term “occupied territory” shall mean territory occupied by a dominant authority asserting governmental, military or police powers of any kind in such territory, but not recognized by the United States as the de jure government of such territory, and (2) the term “corporation, firm or association in occupied territory” shall mean a corporation, firm or association which has, or at any time has had, a place of business in territory which has at any time been occupied territory. The provisions of this section shall be effective only in cases where (1) such claim or advice purports or appears to have been sent from or is reasonably believed to have been sent pursuant to orders originating in, such occupied territory during the period of occupation, or (2) such statute, rule or regulation appears to have emanated from such dominant authority and purports to be or to have been in force in such occupied territory during the period of occupation. This section applies to claims, advices, statutes, rules or regulations given or invoked either before or after the effective date of this section. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1455. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 13. Withdrawals and Collections [1450 - 1456] ( Chapter 13 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Certified Checks [1455 - 1456] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
When a bank certifies a check, it must immediately charge the amount to the drawer’s account.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 13. Withdrawals and Collections [1450 - 1456] ( Chapter 13 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Certified Checks [1455 - 1456] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1455. Whenever a bank certifies a check, the amount thereof shall be immediately charged against the account of the drawer. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 14550. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. )
Every credit union must have a supervisory committee with at least three odd-numbered members, all of whom must be credit union members elected by the members. As an alternative, the board of directors may establish an audit committee if Section 14556 is met.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14550. Every credit union shall have a supervisory committee of at least three persons, provided that the number of members on the committee is an odd number, each of whom shall be a member of the credit union and elected by the members of the credit union. In the alternative, the board of directors may establish an audit committee subject to the requirements of Section 14556. (Amended by Stats. 2016, Ch. 353, Sec. 5. (AB 2274) Effective January 1, 2017.) - 14551. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. )
The supervisory committee may suspend certain credit union officials, call member meetings, inspect records, fill its own vacancies, and declare a committee office vacant under specified absence or inactivity conditions.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14551. The supervisory committee may: (a) Suspend at any time by unanimous vote, at a meeting called for that purpose, the credit committee, or any member thereof, or the credit manager, or any member of the board of directors, or any officer. (b) By a majority vote call a meeting of the members to consider any violation of this division or the bylaws, or any practices of the credit union which, in the opinion of the committee, are unsafe or unauthorized. (c) Inspect the securities, cash, and accounts of the credit union. (d) Fill vacancies in the supervisory committee until the next annual meeting of the members. (e) Declare vacant any office of a member of the supervisory committee if such member is absent from three consecutive regular meetings of the supervisory committee unless excused therefrom or is completely inactive as a member of the supervisory committee for a consecutive 12 months’ period. (Amended by Stats. 1996, Ch. 330, Sec. 1. Effective January 1, 1997.) - 14551.5. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. )
The supervisory committee must review the credit union’s policies and control procedures and take whatever efforts are necessary to help safeguard against fraud and self-dealing.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14551.5. The supervisory committee shall be responsible for reviewing the credit union’s policies and control procedures to safeguard against fraud and self-dealing, and the supervisory committee shall exercise whatever efforts are necessary pursuant to Sections 14551 and 14553 to meet those responsibilities. (Added by Stats. 1996, Ch. 330, Sec. 2. Effective January 1, 1997.) - 14552. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. )
The supervisory committee must give members notice of a special meeting within seven days after certain suspensions.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14552. The supervisory committee shall, within seven days after suspension of any or all members of the credit committee, or any member of the board of directors, or any other officer, cause notice of a special meeting to be given to the members to take such action regarding the suspension as the members deem necessary. (Amended by Stats. 1985, Ch. 951, Sec. 9.) - 14553. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. )
The supervisory committee must do at least one audit and examination of the credit union each year, report to the board of directors, and ensure the reports are presented at the annual members’ meeting and kept with the credit union’s records.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14553. (a) The supervisory committee shall at least once each year make or cause to be made an audit of the books and records and an examination of the business and affairs of the credit union. The supervisory committee shall make a full report of the assets and liabilities, receipts and disbursements of the credit union to the board of directors. Those reports shall be presented at the annual meeting of members and filed with the records of the credit union. (b) The supervisory committee may make or cause to be made any supplementary inspections of the securities, cash, and accounts of the credit union or audits as it deems necessary, and submit reports of those audits to the board of directors. (Amended by Stats. 1998, Ch. 539, Sec. 23. Effective January 1, 1999.) - 14554. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. )
Members of the supervisory committee may not also serve in certain other credit union roles.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14554. No member of the supervisory committee shall serve as a member of the credit committee, as the credit manager, as a member of the board of directors, or as an employee of the credit union. (Amended by Stats. 1982, Ch. 691, Sec. 6.) - 14555. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. )
If the commissioner finds the supervisory committee is not complying with this article, the commissioner may declare its offices vacant and must direct the board to call a special meeting to elect a new supervisory committee.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14555. The commissioner may, after investigation and finding that the supervisory committee is not performing in conformance with this article, declare all offices of the supervisory committee of a credit union vacant and shall direct the board of directors of the credit union to call a special meeting of the members for the purpose of electing a new supervisory committee to serve until the next regular annual meeting. (Amended by Stats. 1979, Ch. 811.) - 14556. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. )
The board may replace a supervisory committee with an audit committee, but membership approval is required and the audit committee must meet specified membership and independence rules.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 4. Supervisory Committee [14550 - 14556] ( Article 4 added by Stats. 1979, Ch. 112. ) ## 14556. (a) The board of directors may, by resolution, establish an audit committee in lieu of a supervisory committee. An audit committee that meets all the requirements of this section shall be deemed to satisfy the requirements for a supervisory committee set forth in Sections 14550 to 14555, inclusive, or in any applicable bylaw provision. (b) The vote of the board of directors to establish an audit committee in lieu of a supervisory committee shall be affirmed by a majority vote of members voting. A membership vote may occur at any regular or special meeting of the members, or by written ballot subject to Section 7513 of the Corporations Code. Following the affirmative vote of the membership, the supervisory committee shall be deemed dissolved upon the appointment of an audit committee and the adoption of appropriate amendments to the credit union bylaws, consistent with subdivision (e) of Section 14103, by the board of directors. (c) The audit committee shall consist of at least three persons, provided that it is an odd number, each of whom shall be a member of the credit union and appointed by a majority of the board of directors. (1) Notwithstanding the limitations of subdivision (b) of Section 7212 of the Corporations Code, the audit committee may be composed of directors, or both directors and nondirectors, provided that no less than a majority of the members of the audit committee at any given time shall be composed of directors. (2) A member of the audit committee shall not serve as a member of the credit committee, as the credit manager, as the board chairman, or as an employee of the credit union. (3) An audit committee member may be appointed or removed by a majority vote of the board of directors and shall serve at the pleasure of the board. The removal of an audit committee member who is also a director of the credit union, for any reason, shall not impact their status as a director. (4) The commissioner, after investigation and finding that the audit committee is not performing in conformance with this article, may direct the board to replace any or all audit committee members. (d) The audit committee shall carry out the responsibilities set forth in subdivisions (a) to (c), inclusive, of Section 14551 and Sections 14551.5, 14552, and 14553 and shall: (1) Ensure that the credit union complies with Section 14252. (2) Ensure that the credit union maintains an effective internal audit program, including a system of internal controls and individuals with sufficient training and experience to adequately and timely review all key areas of a credit union’s operations. (e) The board of directors may, by subsequent resolution, reestablish a supervisory committee in lieu of an audit committee, which shall be affirmed by membership vote. The audit committee shall be deemed dissolved upon the election of a supervisory committee by the membership. (Amended by Stats. 2021, Ch. 762, Sec. 5. (SB 269) Effective January 1, 2022.) - 1456. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 13. Withdrawals and Collections [1450 - 1456] ( Chapter 13 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Certified Checks [1455 - 1456] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
Bank officers and employees must not certify a bank check unless the drawer has enough money on deposit to cover the amount shown on the check.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 13. Withdrawals and Collections [1450 - 1456] ( Chapter 13 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Certified Checks [1455 - 1456] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1456. It shall be unlawful for any officer or employee of a bank to certify any check drawn upon such bank, unless the drawer has on deposit with the bank, at the time such check is certified, an amount to his credit on the books of the bank not less than the amount specified therein. Any bank officer or employee who wilfully violates the provisions of this section or who resorts to any device or receives any fictitious obligations directly or indirectly in order to evade the provisions of this section is guilty of a felony. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1460. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may not rediscount, borrow money, or use its assets as security for borrowed money except as allowed by this division.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1460. A commercial bank shall not rediscount, borrow money, or hypothecate its assets as security for money borrowed except to the extent and upon the conditions set forth in this division. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 14600. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Committee and Loan Officers [14600 - 14605] ( Article 5 added by Stats. 1979, Ch. 112. )
Every credit union must have a credit committee of at least three member-persons, or a credit manager instead, and its bylaws must set out how committee members are selected and how long they serve.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Committee and Loan Officers [14600 - 14605] ( Article 5 added by Stats. 1979, Ch. 112. ) ## 14600. Every credit union shall have a credit committee of at least three persons, each of whom shall be a member of the credit union, or in the alternative, a credit manager, to have general supervision of all obligations of members. The bylaws of the credit union shall provide that either: (1) the members of the credit committee shall be elected by the members of the credit union at their annual meeting, or (2) they shall be appointed by the board of directors, or (3) that the board of directors may establish the position of credit manager in lieu of a credit committee. The bylaws of the credit union shall provide for the terms of office of the credit committee, where the credit committee has been provided for in the bylaws, which shall not exceed three years, and which may be staggered. (Amended by Stats. 1984, Ch. 789, Sec. 3.) - 14601. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Committee and Loan Officers [14600 - 14605] ( Article 5 added by Stats. 1979, Ch. 112. )
Credit committee members, the credit manager, and loan officers may not serve on the supervisory committee.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Committee and Loan Officers [14600 - 14605] ( Article 5 added by Stats. 1979, Ch. 112. ) ## 14601. No member of the credit committee or the credit manager or any loan officer shall serve as a member of the supervisory committee. (Amended by Stats. 1998, Ch. 539, Sec. 24. Effective January 1, 1999.) - 14602. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Committee and Loan Officers [14600 - 14605] ( Article 5 added by Stats. 1979, Ch. 112. )
A credit union generally cannot create an obligation with a member unless the required written approval is obtained; some loan programs are excepted, and loan officers have limits on what they may approve.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Committee and Loan Officers [14600 - 14605] ( Article 5 added by Stats. 1979, Ch. 112. ) ## 14602. (a) (1) No credit union shall create any obligation with a credit union member, without the written approval of a majority of all the members of the credit committee, the credit manager, or a loan officer appointed as provided in this section. (2) Paragraph (1) does not apply to the creation of an obligation in accordance with a credit scoring program, preapproval credit program, or similar program, if the program was adopted by the board of directors, credit committee, or credit manager and complies with a written lending policy on programs of that type established by the board of directors in accordance with Section 15100. (b) The credit committee or the credit manager may, with the approval of the board of directors, appoint one or more loan officers who shall be authorized to approve obligations with credit union members. (c) Neither the credit committee, a credit manager, or any loan officer shall have the power to approve membership applications. (d) No loan officers shall be permitted to approve any extension agreement of any obligation or the refinancing of any obligation except as prescribed in regulations promulgated by the commissioner. (e) The credit committee, or in the alternative, the credit manager shall be provided with a record of each obligation approved or not approved by any loan officer, within 30 days of the approval or disapproval. (Amended by Stats. 1998, Ch. 539, Sec. 25. Effective January 1, 1999.) - 14603. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Committee and Loan Officers [14600 - 14605] ( Article 5 added by Stats. 1979, Ch. 112. )
The credit committee, credit manager, or a loan officer may pre-approve credit for a member, grant loans within the board-set limit, and must periodically review approved credit.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Committee and Loan Officers [14600 - 14605] ( Article 5 added by Stats. 1979, Ch. 112. ) ## 14603. The credit committee, the credit manager, or a loan officer may approve in advance, upon their own motion or upon the application of any member, the extension of credit to any member and loans may be granted to such member within the limit of such extension of credit authorized by the board of directors pursuant to Section 15100. Where an extension of credit has been approved, applications for any extension of credit need not be approved by the credit committee, the credit manager, or loan officer as long as the aggregate amount of such obligations does not exceed the limit of such extension of credit authorized by the board of directors pursuant to Section 15100. The credit committee, the credit manager, or loan officer shall review, from time to time, all extensions of credit approved by them and any extension of credit approved for any member shall expire if such member becomes ineligible for a loan or becomes more than 90 days delinquent in his obligations to the credit union. (Amended by Stats. 1984, Ch. 209, Sec. 2.) - 14604. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Committee and Loan Officers [14600 - 14605] ( Article 5 added by Stats. 1979, Ch. 112. )
A credit union member may appeal a denial of a written application to enter into an obligation to the board of directors.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Committee and Loan Officers [14600 - 14605] ( Article 5 added by Stats. 1979, Ch. 112. ) ## 14604. A credit union member whose written application to enter into any obligation is denied, may appeal from the denial of the credit committee, the credit manager, or loan officer to the board of directors. (Amended by Stats. 1984, Ch. 789, Sec. 5.) - 14605. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Committee and Loan Officers [14600 - 14605] ( Article 5 added by Stats. 1979, Ch. 112. )
A credit manager must not disburse loan proceeds, authorize others to disburse them, or make loans to other credit unions.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 5. Credit Committee and Loan Officers [14600 - 14605] ( Article 5 added by Stats. 1979, Ch. 112. ) ## 14605. A credit manager shall not disburse or have the authority to authorize any person to disburse the proceeds of any loan. A credit manager shall not authorize or make loans to other credit unions. (Added by Stats. 1982, Ch. 691, Sec. 12.) - 1461. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may not hypothecate assets as security for borrowed money if the assets’ value exceeds the borrowed amount by more than 50%, unless the commissioner gives prior written consent.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1461. Assets hypothecated by a commercial bank as security for moneys borrowed shall not exceed in value the amount borrowed by more than 50 percent except with the prior written consent of the commissioner. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1462. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may borrow money, but borrowing above shareholders’ equity needs prior written approval from the commissioner unless another section allows it.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1462. A commercial bank may borrow money by discounting or otherwise, and may borrow money secured by real property owned by the bank, to an amount not in excess of its shareholders’ equity, but shall not borrow money except as provided in Sections 1464 and 1465 in excess of such amount without the prior written approval of the commissioner. The amounts of moneys so borrowed by a commercial bank together with the amount of any of its deposits secured by surety bonds shall not at any one time exceed the amount of its shareholders’ equity without the prior written approval of the commissioner. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1463. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may hypothecate its assets to secure certain public deposits, and it may also do so for moneys payable to other states if the commissioner gives prior approval.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1463. A commercial bank may hypothecate its assets in any manner provided by law to secure the deposits of moneys of the United States, of postal savings funds, of estates in bankruptcy cases, of the State of California, or of any political subdivision, public corporation, or district of the State of California. With the prior approval of the commissioner a bank may hypothecate its assets to secure moneys payable to other states. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1464. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may borrow money to buy U.S. bonds, Treasury certificates, notes, or other U.S. obligations.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1464. A commercial bank may borrow for the purpose of buying from the United States, United States bonds, United States Treasury certificates, or notes or other obligations of the United States. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1465. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may rediscount with, borrow from, or pledge its assets as security for borrowing from certain federal financial institutions.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1465. A commercial bank may rediscount with, borrow money from, or hypothecate its assets as security for money borrowed from a Federal Reserve bank, the Federal Deposit Insurance Corporation, or the Federal Home Loan Bank. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 14650. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. )
Credit unions may buy, acquire, and hold shares of certain corporations if the section’s limitations are met and two-thirds of all directors approve the purchase or acquisition.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. ) ## 14650. Subject to the limitations of Sections 14402, 14403, and 14404, any credit union or credit unions may purchase, acquire and hold outstanding shares of a corporation engaged exclusively in holding property of the character described in Section 14402 and which property is or is to be used for the purposes set forth in Section 14402. The purchase or acquisition of stock of any such corporation shall be approved by two-thirds of all the directors of such credit union or credit unions. (Added by Stats. 1979, Ch. 112.) - 14651. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. )
Credit unions may invest in certain credit-union service organizations, and one category of investment needs commissioner approval.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. ) ## 14651. (a) Every credit union may invest in the shares of stock of a corporation, or in membership or economic interests of a limited liability company, organized solely for the purpose of providing services to credit unions, provided the corporation or limited liability company is formed by a credit union or group of credit unions. (b) Every credit union may invest in the shares of stock of a corporation, or in membership or economic interests of a limited liability company, organized solely for the purpose of providing services to credit unions, provided the corporation or limited liability company is formed by one or more credit unions, one or more corporations or limited liability companies of the type described in subdivision (a), or any combination thereof. (c) Every credit union may invest in the securities of a corporation or in membership or economic interests of a limited liability company that is not a corporation or limited liability company of the type described in subdivision (a) and that provides services to credit unions, provided the investment is approved by the commissioner. (d) “A credit union service organization” means a corporation or limited liability company described in subdivision (a) or (b). (Amended by Stats. 2024, Ch. 305, Sec. 4. (AB 2062) Effective January 1, 2025.) - 14652. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. )
Every credit union may invest in certain securities and other assets treated as legal investments for nonbank licensees.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. ) ## 14652. Every credit union may invest in securities and other assets described in Chapter 10 (commencing with Section 800) of Division 1 as legal investments for nonbank licensees. (Amended by Stats. 2011, Ch. 243, Sec. 16. (SB 664) Effective January 1, 2012.) - 14652.5. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. )
A credit union may sponsor and sell certain investment company securities if its sales staff meet training, experience, and sales-practice standards set by the commissioner or the commissioner’s designee.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. ) ## 14652.5. (a) A credit union may organize, sponsor, operate, control, or render investment advice to, an investment company, or underwrite, distribute, or sell securities of any investment company which has qualified to sell its securities in this state pursuant to Part 2 (commencing with Section 25100) of Division 1 of Title 4 of the Corporations Code, if the officers and employees of the credit union who sell these securities meet such standards with respect to training, experience, and sales practices as established by the commissioner or the commissioner’s designee. For the purpose of this section, “investment company” means an investment company as defined in the Investment Company Act of 1940 (15 U.S.C., Sec. 80a-1 et seq.). (b) The amendments made to this section by the act adding this subdivision shall become operative on July 1, 2026. (Amended by Stats. 2026, Ch. 28, Sec. 18. (SB 170) Effective June 29, 2026. Operative July 1, 2026, by its own provisions.) - 14653. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. )
Credit unions may invest in a qualifying trust for U.S. government and agency securities if the trust is formed by an organization of credit unions or credit union associations.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. ) ## 14653. Credit unions may invest in a trust organized solely for the purpose of investing in United States government securities and United States government agency securities, provided the trust is formed by an organization composed of credit unions or an organization of credit union associations. (Amended by Stats. 1998, Ch. 539, Sec. 26. Effective January 1, 1999.) - 14653.5. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. )
A credit union may make investments that are authorized by regulation or approved in writing by the commissioner.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. ) ## 14653.5. Notwithstanding any other provision of law, a credit union may make any investment authorized by regulation or in writing by the commissioner. (Added by Stats. 1985, Ch. 951, Sec. 10.) - 14654. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. )
A credit union may buy certain conditional sale contracts or vehicle lease agreements tied to property or vehicles sold or leased to its members, and may keep them as an investment.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. ) ## 14654. Credit unions may purchase from the vendor or lessor of any personal property, conditional sale contracts or vehicle lease agreements covering the sale or lease of that property or vehicle to its members. The credit union may hold and retain any such conditional sale contract or vehicle lease agreement as an investment. (Amended by Stats. 1982, Ch. 1570, Sec. 4.5.) - 14656. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. )
A credit union may buy notes from a liquidating credit union if it follows commissioner rules and the price and terms are agreed by the relevant boards or liquidating agent.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. ) ## 14656. A credit union may, in accordance with rules and regulations prescribed by the commissioner, purchase from any liquidating credit union notes made by individual members of such liquidating credit union, at such prices and under such terms as may be agreed upon by the board of directors of the purchasing credit union and the board of directors, or liquidating agent, of the liquidating credit union. (Added by Stats. 1979, Ch. 112.) - 14657. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. )
A credit union may invest in charitable donation accounts, but only under the section’s conditions and limits.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. ) ## 14657. (a) A credit union may invest in charitable donation accounts, or CDAs, in accordance with this section as a means of providing charitable contributions and donations to qualified charities. If a credit union invests in a CDA that satisfies all of the conditions in subdivision (b), then it may do so free from any other investment limitations of this article. (b) (1) The book value of a credit union’s investments in all CDAs, in the aggregate, as carried on the credit union’s statement of financial condition prepared in accordance with generally accepted accounting principles, shall be limited to no more than 5 percent of the credit union’s net worth at all times for the duration of the accounts, as measured every quarterly call report cycle. A credit union shall bring its aggregate accounts into compliance with the maximum aggregate funding limit within 30 days of any breach of this limit. (2) The assets of a CDA shall be held in a segregated custodial account or special purpose entity and shall be specifically identified as a CDA. (3) If a credit union chooses to establish a CDA using a trust vehicle, the trustee shall be regulated by a federal regulatory agency, or a state financial regulatory agency. A regulated trustee or other person or entity that is authorized to make investment decisions for a CDA (manager), other than the credit union itself, shall be either: (A) a registered investment adviser; or (B) regulated by a federal regulatory agency or a state financial regulatory agency. (4) The parties to the CDA, typically the funding credit union and trustee or other manager of the account, shall document the terms and conditions controlling the account in a written agreement. The terms of the agreement shall be consistent with this section. The board of directors shall adopt written policies governing the creation, funding, and management of a CDA that are consistent with this section, shall review the policies annually, and may amend the policies from time to time. A credit union’s CDA agreement and policies, at a minimum, shall comply with all of the following: (A) Provide that the CDA shall make charitable contributions and donations only to qualified charities. (B) Document the investment strategies and risk tolerances the CDA trustee or other manager is required to follow in administering the account. (C) Provide that the credit union shall account for all aspects of the CDA, including, but not limited to, distributions to charities and liquidation of the account, in accordance with generally accepted accounting principles. (D) Indicate the frequency with which the trustee or manager of the CDA shall make distributions to qualified charities, as provided in paragraph (5). (5) A credit union shall distribute to one or more qualified charities, at least once every five years, and upon termination of a CDA, regardless of the length of its term, a minimum of 51 percent of the account’s total return on assets over the period of up to five years. Other than upon termination, the credit union may choose how frequently CDA distributions to charity shall be made during each period of up to five years. The credit union may choose to make periodic distributions over a period of up to five years, or only a single distribution as required at the end of that period. A credit union may choose to donate in excess of the minimum distribution frequency and amount. (6) Upon termination of the CDA, the credit union may receive a distribution of the remaining account assets in cash or a distribution in kind of the remaining account assets, but only if those assets are permissible investments for credit unions. (c) For purposes of this section, the following definitions apply: (1) “Affiliate” means an entity in which the credit union has any ownership interest directly or indirectly. “Affiliate” does not apply to ownership due to the funding of employee benefits. (2) “Charitable contributions and donations” are gifts credit unions provide to assist qualified charities through contributions of staff, equipment, money, or other resources. (3) “Charitable donation account” or “CDA” is a hybrid charitable and investment vehicle that satisfies the conditions set forth in subdivision (b). (4) “Distribution in kind” means the credit union’s acceptance of remaining CDA assets, upon termination of the account, in their original form instead of in cash resulting from the liquidation of the assets. (5) “Qualified charity” means a charitable organization or other nonprofit entity recognized as exempt from taxation under Section 501(c)(3) of the Internal Revenue Code. (6) “Registered investment adviser” means an investment adviser registered with the Securities Exchange Commission pursuant to the Investment Advisers Act of 1940. (7) “Total return” means the actual rate of return on all investments in a CDA over a given period of up to five years, including realized interest, capital gains, dividends, and distributions, but exclusive of account fees and expenses provided they were not paid to the credit union that established the CDA or to any of its affiliates. (Added by Stats. 2018, Ch. 267, Sec. 3. (AB 2862) Effective January 1, 2019.) - 14659. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. )
A credit union may buy an otherwise impermissible investment when it is funding an employee benefit plan obligation and the investment is directly tied to that obligation or potential obligation.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 6. Investments [14650 - 14659] ( Article 6 added by Stats. 1979, Ch. 112. ) ## 14659. (a) A credit union that is investing to fund an employee benefit plan obligation may purchase an investment that would otherwise be impermissible if the investment is directly related to the credit union’s obligation or potential obligation under the employee benefit plan and the credit union holds the investment only for as long as it has an actual or potential obligation under the employee benefit plan. (b) For purposes of this section, specific authorization pursuant to Section 14653.5 is not required. (Added by Stats. 2018, Ch. 267, Sec. 4. (AB 2862) Effective January 1, 2019.) - 1466. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may issue certificates of deposit, including negotiable certificates transferable by endorsement and delivery and nonnegotiable certificates transferable only on the bank’s books.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1466. A commercial bank may issue negotiable certificates of deposit transferable by endorsement and delivery and nonnegotiable certificates transferable only on the books of the bank. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1467. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )
A qualifying small-town commercial bank may act as an insurance agent and as a broker or agent for certain real-property loans, but it must follow the commissioner’s rules and must not guarantee loan principal, loan interest, insurance premiums, or statements in insurance applications.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1460 - 1467] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1467. A commercial bank located in a place the population of which does not exceed 5,000 persons according to the most recent official federal or state census may act as agent for any fire, life, or other insurance company authorized to do business in California by soliciting and selling insurance and collecting premiums and may receive for such services such fees and commissions as may be agreed upon with the insurance company if the bank is engaged in such business on October 1, 1949, and is duly licensed under the Insurance Code, and may act also as the broker or agent for others in making or procuring loans on real property located within 100 miles of the place in which the bank is located and may receive for such services a fee or a commission if it is engaged in such business on October 1, 1949, and is duly licensed. In engaging in either of such businesses the bank shall comply with all rules and regulations of the commissioner relating thereto and shall not guarantee either the principal or interest of any loan procured by it as broker or agent or assume or guarantee the payment of any premium on insurance policies written through it as agent or broker or guarantee the truth of any statement made by an insured in filing an application for insurance. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 147. Verify source ↗
## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )
This section defines “California” for banks, bank offices, and other corporations.
## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 147. “California” means: (a) When used with respect to a bank, in the case of a state bank, a bank that is organized under the laws of this state and, in the case of a national bank, a national bank that maintains its main office in this state. (b) When used with respect to an office of a bank, an office which is located in this state. (c) When used with respect to any corporation other than a bank, a corporation that is organized under the laws of this state. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.) - 1470. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loan and Investment Limitations [1470 - 1473] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
This section defines several terms used in the article, including “affiliate,” “control,” “regulated corporation,” and “securities issued by a person.”
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loan and Investment Limitations [1470 - 1473] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1470. (a) In this article and in Article 4 (commencing with Section 1710) of Chapter 19, “affiliate,” when used with respect to a specified person, means any person controlling, controlled by, or under common control with, the specified person, directly or indirectly, through one or more intermediaries. (b) “Control” has the meaning set forth in Section 1250. (c) “Regulated corporation” means any corporation or limited liability company or similar entity in which a bank makes an equity investment and which the bank controls. (d) “Securities issued by a person” means any debt, equity, or other security issued by a person, and any and all affiliates of that person, issued for the benefit of that person or for the benefit of an affiliate of that person. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 14700. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 7. Reserves [14700 - 14703] ( Article 7 added by Stats. 1979, Ch. 112. )
Every credit union must create and maintain a regular reserve as specified by the commissioner.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 7. Reserves [14700 - 14703] ( Article 7 added by Stats. 1979, Ch. 112. ) ## 14700. Every credit union shall create and maintain a regular reserve as specified by the commissioner. (Amended by Stats. 1998, Ch. 539, Sec. 27. Effective January 1, 1999.) - 14701. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 7. Reserves [14700 - 14703] ( Article 7 added by Stats. 1979, Ch. 112. )
A credit union may charge losses to its regular reserve if allowed by a rule of the commissioner.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 7. Reserves [14700 - 14703] ( Article 7 added by Stats. 1979, Ch. 112. ) ## 14701. Losses incurred by a credit union may be charged to its regular reserve as permitted by rule of the commissioner. (Amended by Stats. 1981, Ch. 765, Sec. 3.) - 14702. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 7. Reserves [14700 - 14703] ( Article 7 added by Stats. 1979, Ch. 112. )
Special reserves must be set up when a regulation requires them or when the credit union’s board of directors or the commissioner finds them necessary.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 7. Reserves [14700 - 14703] ( Article 7 added by Stats. 1979, Ch. 112. ) ## 14702. In addition to the regular reserve, special reserves shall be established when required by regulation or when found necessary by the board of directors of the credit union or by the commissioner. (Amended by Stats. 1980, Ch. 1097, Sec. 6.) - 14703. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 7. Reserves [14700 - 14703] ( Article 7 added by Stats. 1979, Ch. 112. )
A credit union must keep an allowance-for-loan-losses account under generally accepted accounting principles, and the commissioner may order it to increase the account if it is not adequate.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 7. Reserves [14700 - 14703] ( Article 7 added by Stats. 1979, Ch. 112. ) ## 14703. A credit union shall establish and maintain an allowance-for-loan-losses account in accordance with generally accepted accounting principles. The commissioner may order the credit union to increase the amount of its allowance-for-loan-losses account if the commissioner finds that the amount of the account is not adequate. (Amended by Stats. 2004, Ch. 324, Sec. 2. Effective January 1, 2005.) - 1471. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loan and Investment Limitations [1470 - 1473] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
A bank may hold both a person's obligations and that person's securities, but only if the Section 1471 limits and exceptions are satisfied.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loan and Investment Limitations [1470 - 1473] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1471. (a) Subject to the limitations and exceptions in Sections 1481 and 1510, a bank may hold both obligations made by a person, and securities issued by that same person. (b) The total amount of obligations and securities held by a bank pursuant to subdivision (a) shall not exceed 25 percent of the sum of the shareholders’ equity, allowance for loan and lease losses, capital notes and debentures of the bank. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1472. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loan and Investment Limitations [1470 - 1473] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
Banks may make loans to, and invest in securities of, their regulated corporations without Sections 1471, 1481, and 1510 applying, but only with the commissioner’s prior approval and subject to any limits the commissioner imposes.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loan and Investment Limitations [1470 - 1473] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1472. Subject to prior approval by the commissioner and to any limitations the commissioner may impose, the limitations in Sections 1471, 1481, and 1510 shall not apply to loans made by a bank to, and the bank’s investments in securities of, its regulated corporations. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1473. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loan and Investment Limitations [1470 - 1473] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )
For investments held by a bank before January 1, 2009, Sections 1481 and 1510 do not apply, and earlier investment authorizations issued by the commissioner are terminated.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loan and Investment Limitations [1470 - 1473] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1473. Sections 1481 and 1510 shall not apply to investments held by a bank prior to January 1, 2009. All authorizations regarding investments by a bank issued by the commissioner prior to January 1, 2009, are terminated. (Amended by Stats. 2013, Ch. 334, Sec. 37. (SB 537) Effective January 1, 2014.) - 14750. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
Certain credit union officers, directors, committee members, loan officers, and employees must not knowingly create or help create certain obligations involving nonmembers or obligations that do not comply with the division.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14750. Except as provided in Section 14950, any officer, director, member of a committee of a credit union, loan officer appointed pursuant to Section 14602, or employee who knowingly permits the creation of an obligation with, or participates in the creation of an obligation with, a nonmember of the credit union, or knowingly permits the creation of an obligation or participates in the creation of an obligation which is not made in conformity with the requirements of this division, is guilty of a misdemeanor. (Amended by Stats. 2007, Ch. 148, Sec. 6. Effective January 1, 2008.) - 14751. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
Certain listed credit union officers and managers who violate Section 14750 are primarily liable to the credit union for the amount of the unlawful obligation, and illegality is not a defense.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14751. Any officer, director, member of a committee, credit manager, or loan officer appointed pursuant to Section 14602 who violates Section 14750 is primarily liable to the credit union for the amount of any obligation that was created in violation of Section 14750. The illegality of the creation of the obligation is no defense in an action by the credit union to recover any amounts owing as a result of any obligation created in violation of Section 14750. (Amended by Stats. 1984, Ch. 789, Sec. 7.) - 14752. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
A person who willfully violates this division or a rule or order under it can be fined or imprisoned, unless a stated exception applies.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14752. Except as provided for in Section 14051 and this article, any person who willfully violates any provision of this division, or who willfully violates any rule or order issued pursuant to this division, shall upon conviction be fined not more than ten thousand dollars ($10,000) or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail for not more than one year, or be punished by both that fine and imprisonment, but no person may be imprisoned for the violation of any rule or order unless he or she had knowledge of the rule or order. Conviction under this section shall not bar the exercise of the administrative authority of the commissioner provided in Section 14208. (Amended by Stats. 2011, Ch. 15, Sec. 108. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.) - 14753. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
A credit union director, officer, or employee commits a felony if they take or agree to take money, property, or anything of value for personal gain in return for helping with certain loans, obligations, or overdrafts.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14753. Any director, officer, or employee of a credit union who asks for, receives, or agrees to receive any money, property, or thing of value for his personal benefit or advantage for (a) procuring or attempting to procure for any person any loan from that credit union, (b) for the purchase or discount of any note, draft, check, bill of exchange, or other obligation by that credit union, or (c) for permitting any person to overdraw any account with that credit union, is guilty of a felony. (Added by Stats. 1986, Ch. 673, Sec. 2.) - 14754. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
Directors, officers, and employees of a credit union must not knowingly overdraw their account, unless the overdraft is under an approved agreement that meets Sections 14603 and 15050.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14754. Any director, officer, or employee of a credit union who knowingly overdraws his or her account with that credit union, except for any overdraft pursuant to an agreement which is approved in advance as provided in Section 14603 and which is in conformity with Section 15050, is guilty of a felony. (Added by Stats. 1986, Ch. 673, Sec. 3.) - 14755. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
Certain credit union directors, officers, agents, or employees commit a felony if they knowingly mishandle credit union property or fail to make truthful book entries with intent to defraud.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14755. Any director, officer, agent, or employee of any credit union who knowingly receives or possesses the credit union’s property otherwise than in payment of a just demand with intent to defraud, omits to make or omits to cause to be made a full and true entry thereof in the credit union’s books and accounts, or concurs in omitting to make any material entry thereof, is guilty of a felony. (Added by Stats. 1986, Ch. 673, Sec. 4.) - 14756. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
Certain credit union directors, officers, agents, or employees commit a felony if they falsely help make or publish reports, fail to make required book entries, or block inspection of the books.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14756. Any director, officer, agent, or employee of a credit union who (1) knowingly concurs in making or publishing any written report, exhibit, or statement of the credit union’s affairs or financial condition containing any material statement which is false, or (2) having the custody of the credit union’s books, willfully refuses or neglects to make any proper entry in those books as required by law, or (3) refuses to allow the books to be inspected or extracts to be taken therefrom by the commissioner or the commissioner’s deputies or examiners, is guilty of a felony. (Added by Stats. 1986, Ch. 673, Sec. 5.) - 14758. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
A credit union director, officer, or employee must not place the credit union’s funds with another person if that deposit is conditioned on the recipient making a loan or advance to any director, officer, or employee.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14758. Any director, officer, or employee of a credit union who makes or maintains, or attempts to make or maintain, a deposit of the credit union’s funds with any other person on the condition or with the understanding, whether express or implied, that the person receiving that deposit will make a loan or advance, directly or indirectly, to any director, officer, or employee of the credit union is guilty of a felony. (Added by Stats. 1986, Ch. 673, Sec. 7.) - 14759. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
Credit union officers, directors, employees, or agents must not knowingly make false entries, hide or alter records, or omit required entries to deceive specified examiners or officials.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14759. Any officer, director, employee, or agent of any credit union who willfully makes a false or untrue entry in any book, record, report, statement concerning the business or affairs of the credit union, or statement of condition or in connection with any transaction of the credit union with intent to deceive any officer or director thereof, or with intent to deceive any agent or examiner, whether private or public, employed or lawfully appointed to examine into the credit union’s condition or to examine into any of the credit union’s affairs or transactions, or with intent to deceive any public officer, office, or board to which the credit union is required by law to report or which has authority by law to examine into the credit union’s affairs or transactions or to examine into any of the credit union’s affairs or transactions or who, with like intent, willfully omits to make a new entry of any matter particularly pertaining to the business, property, condition, affairs, transactions, assets, or accounts of the credit union in any book, record, report, or statement of the credit union, or who with like intent alters, abstracts, conceals, or destroys any book, record, report, or statement of the credit union made, written, or kept, or required to be made, written, or kept by him or her or under his or her direction, is guilty of a felony. (Added by Stats. 1986, Ch. 673, Sec. 8.) - 14760. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
A credit union director can commit a misdemeanor if they participate in fraudulent insolvency, do an act forbidden by law, or fail to perform a legally imposed duty.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14760. (a) Every director of a credit union is guilty of a misdemeanor who: (1) In case of the fraudulent insolvency of that credit union, has participated in the fraud; or (2) Willfully does any act in his or her capacity as director which is expressly forbidden by law or willfully omits to perform any duty imposed upon him or her as such a director by law. (b) The insolvency of a credit union is deemed fraudulent for the purposes of this section, unless its affairs appear upon investigation to have been administered lawfully and with the same care and diligence that agents receiving a compensation for their services are bound to observe. (Added by Stats. 1986, Ch. 673, Sec. 9.) - 14761. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
A credit union officer or agent may not make or deliver a guaranty or endorsement that could make the credit union liable beyond its lawful lending and discount limits; doing so is a misdemeanor.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14761. Any officer or agent of any credit union who makes or delivers any guaranty or endorsement on behalf of the credit union whereby the credit union may become liable upon any of the credit union’s discounted notes, bills, or obligations in a sum beyond the amount of loans and discounts which the credit union may lawfully make, is guilty of a misdemeanor. (Added by Stats. 1986, Ch. 673, Sec. 10.) - 14762. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
A credit union director who joins a vote or act to make an unlawful loan or discount to a director commits a misdemeanor.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14762. A director of a credit union who concurs in any vote or act of the directors of the credit union by which it is intended to make a loan or discount to any director of the credit union exceeding the amount allowed by law, is guilty of a misdemeanor. (Added by Stats. 1986, Ch. 673, Sec. 11.) - 14763. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
Credit union officers and employees must not hide certain loans, discounts, or securities transactions from the board, and must report them when required by law.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14763. Any officer or employee of any credit union who intentionally conceals from the directors of the credit union any discounts or loans made by the credit union between the regular meetings of its board of directors, or intentionally conceals the purchase of any securities or the sale of the credit union’s securities during that period, or who knowingly fails to report to the board of directors when required to do so by law all discounts or loans made by the credit union and all securities purchased or sold by the credit union between the regular meetings of its board of directors, is guilty of a misdemeanor. (Added by Stats. 1986, Ch. 673, Sec. 12.) - 14764. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
A credit union may not buy certain property or related contracts if an officer, director, or employee has a personal or financial interest, unless it first gets the commissioner’s written consent.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14764. No credit union shall purchase any real or personal property or any interest in real or personal property, including, but not limited to, a leasehold, or any contract arising from the sale of real or personal property or any note or bond in which any officer, director, or employee of the credit union is personally or financially interested, directly or indirectly, for that person’s own account or as the partner or agent of others, without first obtaining the written consent of the commissioner. (Added by Stats. 1986, Ch. 673, Sec. 13.) - 14765. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
Credit union officers, directors, and employees may not buy credit union assets below market value; violations can trigger liability up to twice the asset’s market value.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14765. (a) An officer, as described in Section 14500, a director, or an employee of a credit union shall not purchase, directly or indirectly, or be interested in the purchase of, any of the credit union’s assets for an amount less than the then current market value. Every person who violates this section shall be liable to the people of this state for each offense in an amount of up to twice the market value of the assets purchased. (b) In calculating the market value of an asset, the credit union may use the average value of two valuations of the asset from two separate third parties recognized in the industry for establishing market value in connection with a private-party purchase and sale of comparable assets. (c) This section shall not apply to the purchase of used credit union equipment or furnishings by an officer or director if the current market value of the asset or assets purchased does not exceed five hundred dollars ($500) in the aggregate. (d) This section shall not be construed to prohibit the credit union from making a gift to an officer or director if the current market value of the gift or gifts does not exceed five hundred dollars ($500) in the aggregate. (Amended by Stats. 2024, Ch. 305, Sec. 5. (AB 2062) Effective January 1, 2025.) - 14766. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
Credit union officers, directors, and employees generally may not buy the credit union’s obligations below book value, unless all directors first approve by resolution and the resolution is delivered to the commissioner right away. The board must also put the book-value method in a written policy and keep it consistent with generally accepted accounting principles.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14766. (a) An officer, as described in Section 14500, a director, or an employee of a credit union shall not purchase, directly or indirectly, or be interested in the purchase of, any of the credit union’s obligations for an amount less than the book value thereof, unless all the directors of the credit union previously approve the purchase by resolution and a copy of the resolution is delivered to the commissioner immediately after adoption. Every person who violates this section shall be liable to the people of this state for each offense in an amount of up to twice the book value of the obligations purchased. (b) The method used for determining book value shall be set forth in a written policy governing the sale of credit union obligations established and approved by the board of directors. The method used shall be consistent with generally accepted accounting principles. (Amended by Stats. 2024, Ch. 305, Sec. 6. (AB 2062) Effective January 1, 2025.) - 14767. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
A person must not willfully make a false material statement or willfully leave out a required material fact in a document filed with the commissioner under this division.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14767. It is unlawful for any person willfully to make any untrue statement of a material fact in any document filed with the commissioner under this division, or willfully to omit to state in any document any material fact which is required to be stated therein. (Added by Stats. 1988, Ch. 651, Sec. 5.) - 14768. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. )
Credit union officers, directors, employees, or agents must not misapply or take the credit union’s money, funds, property, or credit; doing so is a felony and the court must order full restitution on conviction.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 4. Management and Operations [14400 - 14768] ( Chapter 4 added by Stats. 1979, Ch. 112. ) ## ARTICLE 8. Penalties [14750 - 14768] ( Article 8 added by Stats. 1979, Ch. 112. ) ## 14768. Any officer, director, employee, or agent of any credit union who abstracts or willfully misapplies any of the money, funds, or property of the credit union, or willfully misapplies its credit, is guilty of a felony. Upon conviction, the court shall, in addition to any other punishment imposed, order the person to make full restitution to the credit union. Nothing in this section shall be deemed or construed to repeal, amend, or impair any existing provision of law prescribing a punishment for such an offense. (Added by Stats. 1990, Ch. 947, Sec. 4.) - 1480. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
This section defines “obligations” for this article and allows the commissioner to prescribe restrictions in specific cases on application by a bank before the obligations are created.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1480. For the purpose of this article: (a) “Obligations” means the total sums for the payment of which a person is obligated, primarily or secondarily, to a commercial bank. (b) Obligations of a person include obligations of others to a commercial bank arising out of loans made by the bank for the benefit of the person. (c) Obligations of an individual include the obligations of a partnership or association for which obligations the individual is liable. (d) Obligations of a partnership include the obligations of its members who are liable for its obligations. (e) Obligations of a corporation include the obligations of all subsidiaries in which it owns or controls a majority interest, except to the extent and under such restrictions as the commissioner may prescribe in specific instances upon special application made by any bank prior to the creation of the obligations. (f) Obligations of a sovereign government or agency include the obligations of instrumentalities or political subdivisions of the government or agency, except to the extent and under such restrictions as the commissioner may prescribe in specific instances upon special application made by any bank prior to the creation of the obligations. (g) Obligations of a limited liability company include the obligations of all subsidiaries in which it owns or controls a majority interest, except to the extent and under any restrictions the commissioner may prescribe in specific instances upon special application made by any bank prior to the creation of the obligations. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 14800. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
A credit union may admit qualified persons to membership only when the listed membership conditions are met, and certain credit union insiders may not approve or extend services to nonmembers.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14800. (a) Every credit union may admit to membership those persons qualified for membership upon the occurrence of any of the following: (1) Upon the purchase of a membership in the credit union as provided in the credit union’s bylaws. (2) Upon the payment of an entrance fee established from time to time by the board of directors. (3) Upon the purchase of one or more shares in the credit union as provided in the credit union’s bylaws. (b) No officer, director, committee member, or employee of any credit union shall approve a person for admission to membership or admit an applicant for membership in the credit union or extend any benefit or service of the credit union to any person, unless that person is admitted to membership in the credit union pursuant to subdivision (a). (c) Nothing in subdivisions (a) and (b) shall be construed to limit the powers of a credit union to engage in joint service programs or business relationships for the benefit of their members where some incidental benefit may flow to third parties to the transaction or the authority for a credit union to engage in joint loan programs pursuant to Section 14959. (d) Nothing in this section prohibits a credit union from admitting to membership a corporation in which the credit union holds shares pursuant to Section 14650 or a corporation formed to provide services to credit unions or to credit union members in which the credit union holds shares or a limited liability company formed to provide services to credit unions or to credit union members in which the credit union holds membership or economic interests pursuant to Section 14651. (Amended by Stats. 2000, Ch. 411, Sec. 3. Effective September 12, 2000.) - 14800.1. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
A credit union may provide certain services and sell or cash checks and similar money transfer instruments to people in its field of membership, even if they are not members, but any fee charged cannot exceed the cost of providing the service.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14800.1. (a) Notwithstanding subdivision (b) of Section 14800 or Section 14750, a credit union may do all of the following: (1) Provide the services specified in paragraph (2) to a natural person within the field of membership, regardless of whether the person is admitted to membership, and charge a fee for the provision of those services, which fee shall not exceed the cost to provide those services. (2) (A) Sell checks and other similar money transfer instruments, including international and domestic electronic fund transfers. (B) Cash checks and other similar money transfer instruments and receive international and domestic electronic fund transfers. (b) For purposes of this section, “checks” shall have the same meaning as set forth in subdivision (f) of Section 3104 of the Commercial Code. (Added by Stats. 2012, Ch. 246, Sec. 1. (AB 2006) Effective January 1, 2013.) - 14801. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
Every credit union may expel members, but only as allowed by the referenced provisions.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14801. Every credit union may expel members as provided in Section 14456 of this division and Section 7341 of the Corporations Code. (Amended by Stats. 1984, Ch. 209, Sec. 4.) - 14802. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
Each member must keep the credit union informed of their current address.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14802. Each member shall keep the credit union informed of his current address. In the event a member fails to do this, a charge may be made to the member’s share account for the actual cost of necessary locator service incurred in determining such an address; provided, however, that such charge shall not exceed five dollars ($5). Such charge shall be made only for amounts paid to a person or concern normally engaged in providing such service and shall be made against the account or accounts of any one member no more than once in any 12-month period. (Repealed and added by Stats. 1979, Ch. 112.) - 14803. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
A credit union generally may not pay commissions or compensation for bringing in new members or extra deposits, but it may offer reasonable incentives under a board-approved incentive policy.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14803. (a) No credit union shall pay any commission or compensation to any person for securing a new member or for getting an existing member to make an additional deposit. (b) Notwithstanding subdivision (a), a credit union may, pursuant to an incentive policy approved by the board of directors, offer and pay a reasonable incentive or inducement to (1) a nonmember for becoming a member of the credit union, (2) an existing member for depositing additional funds, and (3) an employee or member who assists in getting a nonmember to become a new member of the credit union or who assists in getting an existing member to make an additional deposit. (c) Nothing in subdivision (a) limits a credit union from using growth in the number of members in the credit union as part of its compensation program for its employees. (Amended by Stats. 1998, Ch. 539, Sec. 31. Effective January 1, 1999.) - 14804. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
Members of a credit union must hold an annual meeting to elect directors, a supervisory committee, and sometimes a credit committee.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14804. (a) (1) The members of a credit union shall hold an annual meeting for the election of all of the following: (A) Directors. (B) A supervisory committee, unless the board of directors has appointed an audit committee pursuant to Section 14556. (C) A credit committee, if provided for in its bylaws. (2) An annual meeting required by this subdivision shall be held at a time and place, and upon notice, as the bylaws provide. (b) Unless prohibited by the articles or bylaws of the credit union, a regular or special meeting of the members, including an annual meeting, may be conducted, in whole or in part, by means of remote communication as set forth in subdivision (f) of Section 7510 of the Corporations Code. (Amended by Stats. 2024, Ch. 305, Sec. 7. (AB 2062) Effective January 1, 2025.) - 14805. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
Special meetings of credit union members may be called by the board, and must be held if enough members make a written request. Notice must go to all members and state the meeting’s date, time, place, and purpose.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14805. (a) Special meetings of members may be held upon order of the board of directors. Special meetings of members shall be held upon the written request of 10 members or 3 percent of the membership, whichever is greater. Notice of special meetings shall be given to all members specifying the date, time, place, and purpose of the meeting. (b) Unless prohibited by the articles or bylaws of the credit union, a regular or special meeting of members, including an annual meeting, may be conducted, in whole or in part, by means of remote communication as set forth in subdivision (f) of Section 7510 of the Corporations Code. (Amended by Stats. 2024, Ch. 305, Sec. 8. (AB 2062) Effective January 1, 2025.) - 14806. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
In covered credit unions, each member gets only one vote, even if the member holds multiple shares.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14806. In credit unions formed on or after September 15, 1945, no member shall have more than one vote irrespective of the number of shares held by the member. (Amended by Stats. 1998, Ch. 539, Sec. 32. Effective January 1, 1999.) - 14807. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
A member may withdraw from credit union membership at any time, but notice may be required, and inactive or escheated accounts may be treated as voluntarily withdrawn.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14807. (a) A member may withdraw from membership in the credit union at any time. A withdrawing member may be required to give 60 days’ notice of intention to withdraw shares and 30 days’ notice of intention to withdraw certificates for funds, except when a different period of notice is required by the commissioner for the withdrawal of shares or share certificates that may be established by the board of directors. (b) A member who fails to take steps necessary to be removed from inactive status pursuant to Section 14811 may be deemed to have voluntarily withdrawn from credit union membership. (c) A member whose funds have been remitted to the Controller’s office for purposes of escheat consistent with Section 1513 of the Code of Civil Procedure shall be deemed to have voluntarily withdrawn from membership. (Amended by Stats. 2021, Ch. 762, Sec. 7. (SB 269) Effective January 1, 2022.) - 14808. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
A credit union must pay expelled or withdrawn members their amounts on shares or certificates, plus credited dividends or interest, when funds are available and after deducting what they owe the credit union.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14808. All amounts paid on shares or on certificates for funds of an expelled or withdrawn member, with any dividends or interest credited thereto to the date of withdrawal or expulsion, shall be paid to such members as funds become available, and after deducting all amounts due from the member to the credit union. Withdrawing or expelled members have no further rights in the credit union, but are not by expulsion or withdrawal released from any liability to the credit union or its creditors. (Amended by Stats. 1983, Ch. 89, Sec. 7.) - 14809. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
Members who leave the field of membership may be allowed to keep their credit union membership unless the credit union’s bylaws say otherwise.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14809. Members who leave the field of membership may be permitted to retain their membership in the credit union unless otherwise provided in the credit union’s bylaws. (Added by Stats. 1979, Ch. 112.) - 1481. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A person’s obligations to a commercial bank are capped at specified percentages of the bank’s equity-related base, with exceptions for obligations in Sections 1485 and 1483.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1481. The obligations, as defined in Section 1480, excepting the obligations described in Section 1485 and the obligations described in Section 1483, of any one person owing to a commercial bank at any one time shall not exceed the following limitations: (a) Obligations which are unsecured shall not exceed 15 percent of the sum of the shareholders’ equity, allowance for loan losses, capital notes, and debentures of the bank. (b) Obligations, secured and unsecured, in all shall not exceed 25 percent of the sum of the shareholders’ equity, allowance for loan losses, capital notes, and debentures of the bank. The calculation in subdivision (a) and this subdivision shall conform to a commercial bank’s one-time election to opt out of the requirement to include all components of accumulated other comprehensive income pursuant to, and in accordance with, the authority granted in paragraph (2) of subdivision (b) of Section 324.22 of Part 324 of Title 12 of the Code of Federal Regulations. Obligations arising out of the discount of commercial or business paper actually owned by the person negotiating the same and endorsed by such person without limitation, together with the secured and unsecured obligations, if any, of such person, shall not exceed 40 percent of the sum of the shareholders’ equity, allowance for loan losses, capital notes, and debentures of the bank. No commercial bank shall be required, solely by reason of the amendments of this article, to dispose of or reduce any loan which complied with the applicable limitations of this division at the time such loan was made, nor shall any such bank be prevented solely by reason of the provisions of this article from renewing any such loan from time to time. (Amended by Stats. 2022, Ch. 452, Sec. 101. (SB 1498) Effective January 1, 2023.) - 14811. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
A member meeting the stated conditions may be moved to inactive status, and an inactive member loses voting and meeting-notice rights.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14811. (a) A member who has no outstanding obligations with the credit union and whose share account is below the amount established by the bylaws may be transferred to inactive member status. (b) An inactive member has no voting rights, has no right to notice of meetings of members, shall not be considered a member for purposes of determination of a quorum or a required vote and need not be sent the annual report or financial statements except upon request. (c) When one or more of the conditions in subdivision (a) cease to be applicable, an inactive member may be transferred back to regular member status. (d) (1) A member who remains on inactive status for a period of at least 90 days after written notice from the credit union may be deemed to have voluntarily withdrawn from credit union membership. (2) The written notice referred to in paragraph (1) shall notify the member of, at a minimum, all of the following: (A) That the member has been transferred to inactive status. (B) The steps that the member may take to be transferred back to regular member status. (C) That failure to take the steps necessary to be transferred back to regular member status within 90 days, or another period of time in excess of 90 days that the credit union specifies in its bylaws, will be deemed a voluntary withdrawal from credit union membership. (Amended by Stats. 2021, Ch. 762, Sec. 8. (SB 269) Effective January 1, 2022.) - 14812. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
A meeting of members has a quorum when 10% of the members are present, or 50 members, whichever is less, unless the bylaws provide otherwise.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14812. Unless otherwise provided in the bylaws, a quorum for a meeting of members shall be 10 percent of the members or 50 members, whichever is less. (Added by Stats. 1980, Ch. 321, Sec. 11.) - 1482. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
The commissioner may declare some kinds of personal property ineligible as security, and collateral counts only if it meets the stated value rules and other listed conditions.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1482. An obligation shall not be deemed secured by personal property or collateral unless the personal property or collateral held as security is of a kind which has not been declared ineligible by the commissioner and unless it has a market value at least 15 percent greater than the amount of the obligations secured thereby or, if the security is a bank deposit, it shall have a face value at least equal to the amount of the obligations secured thereby. The commissioner may by general regulation declare any particular kinds or classes of personal property ineligible as security. An obligation shall not be deemed secured by real property unless the obligation and the lien securing the same conform to the provisions of Section 1486, 1489, 1494, 1495, or 1496 or the first sentence of Section 1493. Secured and unsecured loans shall be represented by separate notes and shall not be combined in any way within one note or notes. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 14820. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
Credit union members may authorize proxies, but proxy validity is time-limited and certain proxy-related amendments need member approval.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14820. (a) Any member of a credit union may authorize another person or persons to act by proxy with respect to such membership, subject to subdivision (e). Any proxy purported to be executed in accordance with Section 14821 shall be presumptively valid. (b) No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy, except that the maximum term of any proxy shall be three years from the date of execution. Every proxy continues in full force and effect until revoked by the person executing it prior to the vote pursuant thereto, except as otherwise provided in this section. Such revocation may be effected by a writing delivered to the corporation stating that the proxy is revoked or by a subsequent proxy executed by the person executing the prior proxy and presented to the meeting, or as to any meeting by attendance at such meeting and voting in person by the person executing the proxy. The dates contained on the forms of proxy presumptively determine the order of execution, regardless of the postmark dates on the envelopes in which they are mailed. (c) A proxy is not revoked by the death or incapacity of the maker or the termination of a membership as a result thereof unless, before the vote is counted, written notice of such death or incapacity is received by the corporation. (d) Notwithstanding subdivisions (b) and (c), whenever any credit union which is subject to the provisions of this division is insolvent or its capital is impaired, or, when the commissioner determines that a credit union is in danger of insolvency or an impairment of its capital and the board of the directors of the credit union presents a reorganization plan to the commissioner and such plan is approved, the board of directors may, subject to the provisions of this division, solicit irrevocable proxies for a proxyholder who qualifies pursuant to this section. Unless otherwise provided in the articles or bylaws, the proxy of a member which states that it is irrevocable is irrevocable for the period specified therein when it is held by any of the following or a nominee of any of the following: (1) A person who has purchased or who has agreed to purchase the membership. (2) A creditor or creditors of the credit union who extended or continued credit or contracted to perform services to the corporation in consideration of the proxy if the proxy states that it was given in consideration of the extension or continuation of credit or services and the name of the person extending or continuing the credit or performing the service. (3) A person who has contracted to perform services as an employee of the credit union, if the proxy is required by the contract of employment and if the proxy states that it was given in consideration of such contract of employment, the name of the employee, and the period of employment for which the employee has contracted. Notwithstanding the period of irrevocability specified, the proxy becomes revocable when the agreement to purchase is terminated, the debt of the credit union or the member is paid, or the period of employment provided for in the contract of employment or the contract to perform services has terminated. In addition to paragraphs (1) through (3), a proxy of a member may be made irrevocable notwithstanding subdivision (c) if it is given to secure the performance of a duty or to protect a title, either legal or equitable, until the happening of events which by its terms, discharge the obligations secured by it. (e) Subdivision (a) notwithstanding: (1) No amendment of the articles or bylaws repealing, restricting, creating or expanding proxy rights may be adopted without approval by the members. (2) No amendment of the articles or bylaws restricting or limiting the use of proxies may affect the validity of a previously issued irrevocable proxy during the term of its irrevocability, so long as it complied with applicable provisions, if any, of the articles or bylaws at the time of issuance, and is otherwise valid under this section. (f) Anything to the contrary notwithstanding, any revocable proxy covering matters requiring a vote of the members pursuant to Section 7222, Section 7224, Section 7233, Section 7812, paragraph (2) of subdivision (a) of Section 7911, Section 8012, subdivision (a) of Section 8015, Section 8610, or subdivision (a) of Section 8719 of the Nonprofit Mutual Benefit Corporation Law, Part 3 (commencing with Section 7110) of Division 2 of Title 1 of the Corporations Code, or subdivision (e) is not valid as to such matters unless it sets forth the general nature of the matter to be voted on. (Amended by Stats. 1985, Ch. 951, Sec. 10.5.) - 14821. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
Credit unions must give members voting choices on distributed proxies or written ballots, follow member instructions when votes are cast, and send annual notices for certain three-year proxies.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14821. (a) Except for solicited proxies which on their face provide for a period of validity of three years from the date of execution of the proxy, any form of proxy or written ballot distributed to 10 or more members of a credit union shall afford an opportunity on the proxy or form of written ballot to specify at the time the written ballot or proxy is distributed, a choice between approval and disapproval of each matter or group of related matters intended to be acted upon at the meeting for which the proxy is solicited or by such written ballot, and shall provide, subject to reasonable specified conditions, that where the person solicited specifies a choice with respect to any such matter the vote shall be cast in accordance therewith. (b) In any election of directors, any form of proxy or written ballot in which the directors to be voted upon are named therein as candidates and which is marked by a member “withhold” or otherwise marked in a manner indicating that the authority to vote for the election of directors is withheld, shall not be voted either for or against the election of a director. (c) In the case of any solicited proxy which on its face provides for a period of validity of three years from the date of execution of the proxy, the credit union shall provide to the person executing the proxy a written notice at the time of solicitation and in each succeeding year of validity thereof, which shall advise the member of the nature of each matter or group of related matters on which the proxy may be voted. Notice pursuant to this subdivision may be sent with notice to the members of the date, time, and place of the annual meeting. (d) Failure to comply with this section shall not invalidate any corporate action taken, but may be the basis for challenging any proxy at a meeting or written ballot and the superior court may compel compliance therewith at the suit of any member. (Amended by Stats. 1987, Ch. 1045, Sec. 2.) - 14822. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. )
A credit union member may not vote by proxy on a matter sent by mail to all members in a written ballot, and any valid revocable proxy already issued is suspended in that situation.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 5. Members [14800 - 14822] ( Chapter 5 added by Stats. 1979, Ch. 112. ) ## 14822. Notwithstanding any other provision to the contrary, no member shall vote by proxy on any matter submitted by mail to all members of a credit union in a written ballot pursuant to Chapter 5 (commencing with Section 7510) of Part 3 of Division 2 of Title 1 of the Corporations Code, and the powers of any previously issued or outstanding valid, revocable proxy are suspended when any matter is submitted by mail to all members in a written ballot pursuant to Chapter 5 (commencing with Section 7510) of Part 3 of Division 2 of Title 1 of the Corporations Code. (Added by Stats. 1984, Ch. 209, Sec. 7.) - 1483. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may issue letters of credit and may accept certain short-term drafts or bills of exchange, but it must stay within stated percentage limits unless the commissioner authorizes a higher aggregate limit or the acceptance is covered by qualifying security or a participation agreement.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1483. (a) In addition to the limitations contained in Section 1481 a commercial bank may issue letters of credit and a commercial bank may accept drafts or bills of exchange drawn upon it having not more than six months’ sight to run, exclusive of days of grace, which grow out of transactions involving the importation or exportation of goods; or which grow out of transactions involving the domestic shipment of goods; or which are secured at the time of acceptance by a warehouse receipt or other such document conveying or securing title covering readily marketable staples. A commercial bank shall not accept such drafts or bills in the aggregate to an amount exceeding 150 percent of the sum of its shareholders’ equity, allowance for loan losses, capital notes, and debentures or, when authorized by the commissioner, to an amount exceeding 200 percent of the sum of its shareholders’ equity, allowance for loan losses, capital notes, and debentures. A commercial bank shall not accept such drafts or bills for any one person to an amount exceeding 10 percent of the sum of its shareholders’ equity, allowance for loan losses, capital notes, and debentures, unless the bank is and remains secured by either attached documents or some other actual security growing out of the same transaction as the acceptance. (b) With respect to a bank which issues an acceptance, the limitations contained in this section shall not apply to that portion of an acceptance which is issued by such bank and which is covered by a participation agreement sold to another institution. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1484. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may accept certain foreign-bank drafts or bills of exchange only with the commissioner’s approval, and only within stated 10% and 50% limits.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1484. With the approval of the commissioner a commercial bank may accept drafts or bills of exchange drawn upon it having not more than three months’ sight to run, exclusive of days of grace, drawn by banks or bankers in foreign countries for the purpose of furnishing dollar exchange as required by the usages of trade in the respective countries; provided, no commercial bank shall accept such drafts or bills of exchange for any one bank to any amount exceeding 10 percent of the sum of the shareholders’ equity, allowance for loan losses, capital notes, and debentures of the accepting bank unless the draft or bill of exchange is accompanied by documents conveying or securing title or unless the bank is secured by some other adequate security. A commercial bank shall not accept such drafts or bills, whether secured or unsecured, in the aggregate to an amount exceeding 50 percent of the sum of its shareholders’ equity, allowance for loan losses, capital notes, and debentures. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1485. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
Section 1485 lists loans and related obligations that are excluded from the Section 1481 lending-limit calculations.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1485. The limitations of Section 1481 shall not apply to the following and the following shall not be included among the obligations of a person for the purpose of applying these limitations: (a) Loans secured by obligations of the United States or by obligations unconditionally guaranteed both as to principal and interest by the United States, having a market value at least 10 percent in excess of the loans secured thereby. (b) Loans in an amount and of a type or class previously approved in writing by the commissioner that are secured by not less than a like amount of obligations of the United States or by obligations unconditionally guaranteed both as to principal and interest by the United States. (c) Loans to the extent that they are covered by guarantees or by commitments to take over or to purchase without recourse made by (1) any Federal Reserve bank, (2) the United States, (3) any department, bureau, board, commission, agency, or establishment of the United States, including any corporation wholly owned directly or indirectly by the United States, or (4) any small business development corporation, urban development corporation, or rural development corporation incorporated pursuant to Part 5 (commencing with Section 14000) of Division 3 of Title 1 of the Corporations Code. (d) Drafts or bills of exchange drawn in good faith against actual existing values with negotiable bills of lading attached, whether or not accepted by the drawee. (e) Bankers’ acceptances of other banks which are eligible for rediscount with a Federal Reserve bank. (f) Obligations resulting from daily clearances through any clearinghouse association. (g) Obligations that are fully guaranteed or fully insured or covered by a commitment to fully guarantee or fully insure by the Federal Housing Administration. (h) Obligations, including portions thereof, to the extent secured by a segregated deposit account in the lending bank, provided a security interest in the deposit has been perfected under applicable law, and subject to all of the following conditions: (1) Where the deposit is eligible for withdrawal before the secured obligation matures, the lending bank shall establish internal procedures to prevent release of the security without the lending bank’s prior consent. (2) A deposit that is denominated and payable in a currency other than that of the obligation that it secures may be eligible for this exception if the currency is freely convertible to United States dollars. (A) This exception applies only to that portion of the obligation that is covered by the United States dollar value of the deposit. (B) The lending bank shall establish procedures to periodically revalue foreign currency deposits to ensure that the loan or extension of credit remains fully secured at all times. (i) Obligations described in Section 1510. (Amended by Stats. 2013, Ch. 334, Sec. 38. (SB 537) Effective January 1, 2014.) - 14850. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
Credit unions covered by this section are exempt from certain securities-law qualification requirements for selling and issuing membership shares, certificates for funds, and other securities, and they do not have to file a certificate for determination of preference with the Secretary of State for share offerings if they comply with the division and the commissioner’s rules.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14850. The Corporate Securities Law relating to the necessity of qualification of the sale of securities does not apply to the sale and issue of membership shares, certificates for funds, and other securities, by credit unions organized under this division or lawfully doing business in this state. No credit union lawfully doing business in this state shall be required to file a certificate for determination of preference with the office of the Secretary of State in connection with any share offering so long as it complies with all applicable provisions of this division and the rules of the commissioner. (Amended by Stats. 1980, Ch. 321, Sec. 12.) - 14851. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may issue shares to certain members, officials, other credit unions, and coowners, but it may not give nonmembers membership privileges just because they coown shares. Low-income-designated credit unions may also issue shares to nonmembers, subject to a 20% cap unless the commissioner gives written approval.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14851. (a) A credit union may issue shares as follows: (1) To a member qualified pursuant to the credit union’s bylaws. (2) To an officer, employee, or agent of nonmember units of federal, Indian tribal, state, or local governments, and political subdivisions thereof, when acting in that officer’s, employee’s, or agent’s official capacity. (3) To a member or nonmember state or federal credit union. (4) (A) In coownership to a member and a person designated by the member. (B) As used in this paragraph, coownership includes, but is not limited to, joint tenancy, tenancy in common, or community property forms of ownership. (b) Membership privileges, including voting and obtaining a loan, may not be made available to a nonmember as a result of ownership of shares solely as a coowner of shares with a member. A certificate or other evidence of shares that is issued shall contain the words “No transfer of voting rights or other membership privilege is permitted by virtue of a transfer of shares.” Shares may be transferred to a public agency lawfully entitled to receive the shares when designated by a member as an assignee of an account pledged as a surety deposit to the public agency by the member. (c) A credit union that has a low-income designation pursuant to Section 701.34 of the regulations of the National Credit Union Administration (12 C.F.R. Sec. 701.34) may issue shares to nonmembers. Except with the written approval of the commissioner, the total number of shares issued by the credit union to nonmembers pursuant to this subdivision shall not exceed 20 percent of the unimpaired capital and surplus of the credit union. (Amended by Stats. 2021, Ch. 762, Sec. 9. (SB 269) Effective January 1, 2022.) - 14852. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may charge a reasonable fee when transferring its shares.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14852. Every credit union may charge a reasonable fee for the transfer of its shares. (Repealed and added by Stats. 1979, Ch. 112.) - 14853. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may open or maintain certain accounts for a minor, and the minor may withdraw, transfer, or pledge the funds and receive amounts due on the same terms as an adult.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14853. A credit union may issue shares or certificates for funds to a minor of any age or maintain any other account authorized for credit union members for a minor, and receive payments thereon by or for the minor. The minor is entitled to withdraw, transfer, or pledge any shares or certificates or other moneys owned by him or her and to receive from the credit union all dividends, interest, or other money due thereon in the same manner and subject to the same conditions as an adult. The receipt or acquittance of a minor constitutes a valid release and discharge of the credit union for the payment of dividends, interest, or other money due to the minor. (Amended by Stats. 1983, Ch. 6, Sec. 4.) - 14854. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union share account that is a multiple-party account is governed by Probate Code Part 2, subject to Section 14860.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14854. Subject to Section 14860, a credit union share account that is a multiple-party account, as defined in Section 5132 of the Probate Code, is governed by Part 2 (commencing with Section 5100) of Division 5 of the Probate Code. (Amended by Stats. 1990, Ch. 79, Sec. 9. Operative July 1, 1991, pursuant to Stats. 1990, Ch. 710, Sec. 46.) - 14855. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
Every credit union may receive money, accumulate funds to be loaned, and issue certificates for funds; those certificates must state the date, amount, interest rate, and when principal and interest are payable.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14855. Every credit union may receive money and accumulate funds to be loaned and execute certificates for funds for the money received. The certificates for funds shall specify the date, amount, rate of interest, and when the principal and interest are payable. (Added by Stats. 1979, Ch. 112.) - 14856. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may place a lien on a member’s shares and dividends for obligations owed by that member, including dues or charges payable by the member.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14856. Every credit union may impress a lien upon the shares and dividends of any member to the extent of any obligations entered into with that member and for any dues or charges payable by that member. (Amended by Stats. 1984, Ch. 789, Sec. 9.) - 14857. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may cancel a member’s shares if the member withdraws or is expelled, and use the share value to pay the member’s debt to the credit union.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14857. Every credit union may cancel the shares of any member who withdraws or is expelled, and apply the value of the shares to the liquidation of the member’s indebtedness to the credit union. (Added by Stats. 1979, Ch. 112.) - 14858. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
Every credit union must apply for and obtain insurance or a share guaranty that is acceptable to the commissioner.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14858. Every credit union shall apply for and obtain insurance as provided for by Title II of the Federal Credit Union Act (12 U.S.C. Sec. 1781 and following), or other insurance or guaranty of shares that is not unsatisfactory to the commissioner. In seeking and retaining this insurance or guaranty, a credit union may do all things and assume and discharge all obligations required of it when not in conflict with the laws of this state. (Amended by Stats. 1998, Ch. 539, Sec. 33. Effective January 1, 1999.) - 1486. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may make certain real-property secured loans if the lease or loan terms and loan-to-value limits meet the listed conditions.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1486. A commercial bank may lend on the security of a first lien on real property or a first lien on a leasehold under a lease which does not expire, or which has been extended or renewed so that it does not expire, for at least 10 years beyond the maturity date of the loan, if: (a) The term of the loan does not exceed 10 years and the amount does not exceed 60 percent of the sound market value of the property or leasehold, together with the improvements located on the property which are made subject to the lien, as determined by proper appraisal. (b) The term of the loan does not exceed 30 years, is repayable in substantially equal installments not less often than monthly (or a variation therefrom as may be authorized under a loan executed pursuant to Section 1916.5 or 1916.8 of the Civil Code), with payments commencing not later than 60 days from the date of the loan or, in the case of a construction loan, commencing not later than one year from the date of the loan, and the amount does not exceed 90 percent of the sound market value of the property or leasehold, together with the improvements located on the property which are made subject to the lien, as determined by proper appraisal, provided, however, the loan may exceed 90 percent of the sound market value of the property or leasehold if that portion of the loan which is in excess of 90 percent is guaranteed or insured by a private insurer licensed by the Insurance Commissioner. (c) The loan is made pursuant to and in conformance with regulations adopted under Section 1916.12 of the Civil Code. (d) The loan is on a farm or productive agricultural lands, the term does not exceed 30 years, is repayable in substantially equal installments not less often than annually, and the amount does not exceed 90 percent of the sound market value of the property or leasehold, together with the improvements located on the property which are made subject to the lien, as determined by proper appraisal. (e) The term of the loan does not exceed six months and the amount does not exceed 85 percent of the sound market value of the property or leasehold, together with the improvements located on the property which are made subject to the lien, as determined by proper appraisal. (f) The term of the loan does not exceed 60 months, the amount does not exceed 85 percent of the sound market value of the property or leasehold, together with the improvements located on the property which are made subject to the lien, as determined by proper appraisal, and the loan is for the purpose of financing building operations under a plan providing for payment of the loan or providing for refinancing by loans otherwise permitted by this chapter. A commercial bank may make a loan without regard to the above restrictions when necessary to facilitate the sale of real property owned by the bank. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 14860. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union generally may not exercise trust powers unless it qualifies as a trust company, but it may act as trustee or custodian in limited plan-related circumstances and must follow recordkeeping and other regulatory rules.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14860. Except as provided in this section and Part 2 (commencing with Section 5100) of Division 5 of the Probate Code, no credit union shall exercise trust powers except upon qualifying as a trust company pursuant to Division 1 (commencing with Section 99). (a) Notwithstanding any other law relating to trusts and trust authority, subject to the regulations of the commissioner, a credit union may act as a trustee or custodian, and may receive reasonable compensation for so acting, under any written trust instrument or custodial agreement created or organized in the United States which is a part of a pension, education, or medical plan for its members or groups or organizations of its members, which qualifies or has qualified for specific tax treatment under Section 220, 223, 401, 408, 408A, 457, or 530 of the Internal Revenue Code, Title 26 of the United States Code, or any deferred compensation plan for the benefit of the credit union’s employees, provided the funds received pursuant to these plans are invested as provided in Section 16040 of the Probate Code. All funds held by a credit union as trustee or in a custodial capacity shall be maintained in accordance with applicable laws and rules and regulations as may be promulgated by the Secretary of Labor, the Secretary of the Treasury, or any other authority exercising jurisdiction over the trust or custodial accounts. The credit union shall maintain individual records for each participant or beneficiary that show in detail all transactions relating to the funds of each participant or beneficiary. The trust instrument or agreement shall provide for the appointment of a successor trustee or custodian by a person, committee, corporation, or organization other than the credit union or any person acting in his or her capacity as a director, employee, or agent of the credit union, upon notice from the credit union or the commissioner that the credit union is unwilling or unable to continue to act as trustee or custodian. (b) Shares may be issued in a revocable or irrevocable trust subject to the following: (1) When shares are issued in a revocable trust, the settlor shall be a member of the credit union issuing the shares in his or her own right. If the trust has joint settlors, who are spouses, then only one settlor need be a member of the credit union. (2) When shares are issued in an irrevocable trust, the settlor or the beneficiary shall be a member of this credit union in his or her own right. For purposes of this section, shares issued pursuant to a pension plan authorized by this section shall be treated as an irrevocable trust unless otherwise indicated in rules and regulations issued by the commissioner. (3) This subdivision does not apply to trust accounts established prior to the effective date of this subdivision. (Amended by Stats. 2016, Ch. 50, Sec. 37. (SB 1005) Effective January 1, 2017.) - 14861. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may not issue shares to people who are not qualified for membership under its bylaws, except for coownership shares allowed by Section 14851.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14861. No credit union shall issue shares to anyone not qualified for membership under its bylaws, except shares issued in coownership as provided in Section 14851. (Amended by Stats. 1980, Ch. 52, Sec. 9.) - 14863. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may not charge a member or depositor for not making, or being late on, periodic investments in a periodic certificate for funds, and it must pay interest on those certificates at the same rate as other certificates for funds.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14863. (a) A credit union shall not impose any charge on a member or depositor holding a periodic certificate for funds for the failure of such member or depositor to invest, or for the late investment of, any agreed periodic installment investment in such a periodic certificate for funds. A credit union shall pay interest on periodic certificates for funds at the same rate of interest per annum as is paid on certificates for funds as to which a member or depositor has not agreed to make periodic installment investments. (b) As used in this section “periodic certificate for funds” means a certificate for funds under which a member or depositor undertakes to make periodic investments of a specified amount into one account, except, however, a periodic certificate for funds shall not mean an impound account established for the purpose of payment of taxes or other expenses and obligations in connection with a loan secured by real property. (Added by Stats. 1979, Ch. 112.) - 14865. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
Credit unions must show member shares in monetary amounts, not by share counts, and they may issue shares without a limit on quantity.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14865. Shares issued by a credit union to a member shall be evidenced in monetary amounts rather than by numbers of shares. The shares owned by a member also may be referred to as a “share account”. There shall be no limit to the amount of shares which a credit union may issue. (Added by Stats. 1980, Ch. 321, Sec. 14.) - 14866. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
Credit union shares must be evidenced by a certificate, passbook, statement, or other evidence approved by the commissioner, and that evidence is not treated as an investment security under the Commercial Code.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14866. The evidence of credit union shares issued shall be a certificate, a passbook, a statement or other evidence approved by regulation of the commissioner. The evidence of any credit union shares shall not constitute an “investment security” under Division 8 (commencing with Section 8101) of the Commercial Code. (Amended by Stats. 1983, Ch. 89, Sec. 8.) - 14867. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
The board of directors sets written withdrawal procedures for shares and certificates for funds, and it may waive or eliminate notice of intent to withdraw or transfer funds unless notice is required by applicable law.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14867. (a) Shares, including special shares, and certificates for funds may be withdrawn for payment to the owner or for any third party, in the manner and in accordance with written procedures which shall be established by the board of directors. (b) The board of directors may waive any requirement of notice of intent to withdraw or provide that there is no requirement of notice of intent to withdraw or to transfer funds, except when requirement of the notice is imposed by applicable law. (c) Unless otherwise provided by written agreement of the parties, the rights, responsibilities, and liabilities of a person regarding an item withdrawn from a credit union, or transferred to a credit union or otherwise handled by a credit union are defined in and determined by the provisions of Division 3 (commencing with Section 3101) and Division 4 (commencing with Section 4101) of the Commercial Code, as if the credit union were a bank. (Amended by Stats. 1984, Ch. 452, Sec. 4.) - 14868. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
For a Totten trust account, the deposit agreement must list the current address of each beneficiary.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14868. (a) As used in this section: (1) “Beneficiary” has the meaning given that term in Section 5126 of the Probate Code. (2) “Totten trust account” has the meaning given that term in Section 80 of the Probate Code. (b) In the case of a Totten trust account, the deposit agreement shall indicate the current address of each beneficiary. (Added by Stats. 1989, Ch. 397, Sec. 18. Operative July 1, 1990, by Sec. 42 of Ch. 397.) - 1487. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
Certain deed of trust or mortgage provisions for bank loans are enforceable even if the security interest in the property has been impaired.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1487. (a) The provisions of any deed of trust or mortgage on real property which authorize any state or nationally chartered bank to accelerate the maturity date of the principal and interest on any loan secured thereby or to exercise any power of sale or other remedy contained in the deed of trust or mortgage, upon the failure of the trustor or mortgagor to pay, at the times provided under the terms of the deed of trust or mortgage, any taxes, rents, assessments, or insurance premiums with respect to the real property securing the loan, or upon the failure to pay any advances made with respect to the deed of trust or mortgage by the state or nationally chartered bank, shall be enforceable whether or not an impairment of the security interest in the real property has resulted from the failure of the trustor or mortgagor to pay the taxes, rents, assessments, insurance premiums, or advances. (b) “State or nationally chartered bank,” as used in this section and Section 1488, includes any person authorized by this state to make or arrange loans secured by real property, or a holding company of a state or nationally chartered bank or any successor in interest. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 14870. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may run or join a savings promotion if it meets the listed fairness and no-fee conditions.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14850 - 14870] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14870. (a) For purposes of this section, the following definitions apply: (1) “Nonqualifying account” means a deposit account, other than a demand deposit account, that is not a qualifying account. (2) “Qualifying account” means a deposit account, other than a demand deposit account, through which a credit union’s depositors may obtain chances to win prizes in a savings promotion. (3) “Savings promotion” means a contest or promotion to encourage savings deposits that is sponsored by one or more credit unions, or by a credit union trade association or its subsidiary in conjunction with one or more credit unions, and in which credit union depositors are offered a chance to win designated prizes. (b) A credit union may sponsor or participate in a savings promotion if all of the following requirements are satisfied: (1) Credit union depositors are not required to pay any fee or otherwise provide any consideration in order to enter the savings promotion. (2) All material terms of, and fees charged by a credit union in connection with, a qualifying account are comparable to those of comparable nonqualifying accounts offered by the credit union. (3) Each entry in the savings promotion has an equal chance of winning. (4) Participants in the savings promotion are not required to be present at a prize drawing in order to win. (c) For purposes of this section, a depositor’s deposit of at least a specified amount of money in a qualifying account, which is required in order to enter the savings promotion, is not consideration if the interest rate associated with the qualifying account is not reduced, as compared to comparable nonqualifying accounts offered by the credit union, to account for the possibility of winning a prize. (d) A savings promotion offered by a credit union shall not be considered a lottery within the meaning of Section 319 or 319.3 of the Penal Code, or a raffle within the meaning of Section 320.5 of the Penal Code. (Added by Stats. 2018, Ch. 847, Sec. 2. (SB 1055) Effective January 1, 2019.) - 1488. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A deed of trust or mortgage may validly require a bank to receive and manage insurance proceeds for the real property.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1488. The provisions of any deed of trust or mortgage on real property which authorize any state or nationally chartered bank to receive and control the disbursement of the proceeds of any policy of fire, flood, or other hazard insurance respecting the real property shall be enforceable whether or not an impairment of the security interest in the property has resulted from the event that caused the proceeds of the insurance policy to become payable. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1489. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may make certain first-lien loans on real property or qualifying leaseholds if specified guarantee, insurance, or SBA-related conditions are met.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1489. A commercial bank may lend on the security of a first lien on real property or a first lien on a leasehold under a lease which does not expire, or which has been extended or renewed so that it does not expire, for at least 10 years beyond the maturity date of the loan, if the criteria of any of the following subdivisions are satisfied: (a) The loan is fully guaranteed or insured or covered by a commitment to guarantee or insure by the United States, the Federal Housing Administrator, or by any other agency of the United States which the commissioner shall have approved for the purposes of this subdivision as an issuer of insurance or guarantees of loans on real property, whether the proceeds of the guarantee or insurance is payable in cash or in obligations of the United States. (b) The loan is fully guaranteed by the United States or any agency thereof pursuant to the “Servicemen’s Readjustment Act of 1944” or any act of Congress supplementary or amendatory thereof, or, if a portion of the loan is so guaranteed, then if the unguaranteed portion of the loan does not exceed 80 percent of the sound market value of the property or leasehold for loan purposes as determined by proper appraisal. (c) The loan is one in which the Small Business Administration cooperates through agreements to participate on an immediate or deferred basis under the Small Business Act, as amended. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 149. Verify source ↗
## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )
This section defines “CAMELS composite rating” by reference to another regulation.
## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 149. “CAMELS composite rating” shall have the meaning set forth in Section 327.8(j) of Title 12 of the Code of Federal Regulations. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.) - 1490. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may not make loans, in the aggregate, above 5% of its assets when the loans are secured by the stock of one corporation or the bonds of one obligor, with specified bond exceptions.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1490. A commercial bank shall not lend in the aggregate more than 5 percent of its assets upon the security of the stock of any one corporation or upon the security of the bonds of any one obligor except bonds of the United States or for the payment of which the credit of the United States is pledged, bonds of the State of California or for the payment of which the credit of the State of California is pledged, and bonds of any county, city and county, city, metropolitan water district, school district, or irrigation district of the State of California which qualify as investments for savings banks. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 14900. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Dividends [14900 - 14905] ( Article 2 added by Stats. 1979, Ch. 112. )
Dividends do not have to be paid on a share account if it has less than the minimum balance set by the bylaws.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Dividends [14900 - 14905] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14900. Dividends need not be paid on a share account having less than the minimum balance prescribed in the bylaws. (Amended by Stats. 2018, Ch. 267, Sec. 7. (AB 2862) Effective January 1, 2019.) - 14901. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Dividends [14900 - 14905] ( Article 2 added by Stats. 1979, Ch. 112. )
The board of directors may set dividend rates and payment terms in advance, but a credit union may pay a dividend only as allowed by Section 14902.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Dividends [14900 - 14905] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14901. The rates of dividends and terms of payment may be established in advance by action of the board of directors. However, nothing in this section shall be construed to permit any credit union to pay a dividend except as provided in Section 14902. (Amended by Stats. 1998, Ch. 539, Sec. 34.7. Effective January 1, 1999.) - 14902. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Dividends [14900 - 14905] ( Article 2 added by Stats. 1979, Ch. 112. )
Credit union directors may declare dividends for the dividend period, but the credit union must first make the required transfer to regular reserve and may not pay dividends or loan interest refunds if doing so would create a deficit in undivided profits.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Dividends [14900 - 14905] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14902. The directors of any credit union may, for the dividend period, declare dividends from its undivided profits as provided by law, but no credit union shall credit or pay any dividends or pay loan interest refunds to its members until it has transferred to its regular reserve such part of its gross income as is required by Section 14700. However, nothing in this division shall be construed to permit the credit union to credit or pay a dividend from its undivided profits account when the credit or payment would result in a deficit in the undivided profits account. (Amended by Stats. 1983, Ch. 263, Sec. 4.) - 14905. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Dividends [14900 - 14905] ( Article 2 added by Stats. 1979, Ch. 112. )
Amounts credited or paid by a credit union within 30 days after the end of its income year are treated as if made on the last day of that income year.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 6. Share Accounts and Certificates for Funds [14850 - 14905] ( Chapter 6 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Dividends [14900 - 14905] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14905. Amounts paid or credited by a credit union to its members or depositors on or before the 30th day after the close of its income year shall be deemed for all purposes as paid or credited by the credit union upon the last day of the income year. This section is applicable only to credit unions as entities and does not apply to the members or depositors thereof. (Added by renumbering Section 14907 by Stats. 1984, Ch. 303, Sec. 9.) - 1491. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank must not make certain loans secured by corporate securities in the listed situations, and one exception applies if enough cash has already been paid toward the securities purchase.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1491. No loan shall be made by any commercial bank upon the securities of one or more corporations, the payment of which loan is undertaken, in whole or in part, severally, but not jointly, by two or more persons in any of the following circumstances: (a) If the borrowers or underwriters are obligated absolutely or contingently to purchase the securities, or any of them, collateral to the loan, unless the borrowers or underwriters have paid on account of the purchase of the securities an amount in cash, or its equivalent, equal to at least 25 percent of the several amounts for which they remain obligated in completing the purchase of the securities. (b) If the commercial bank making the loan is liable, directly or indirectly, or contingently, for the repayment of the loan or any part thereof. (c) If its term, including any renewal thereof by agreement, express or implied, exceeds the period of one year. (d) Or to an amount under any circumstances in excess of 25 percent of the sum of the commercial bank’s shareholders’ equity, allowance for loan losses, capital notes, and debentures. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1492. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may take a lien or pledge on property as extra security for a loan already made in good faith.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1492. Nothing in this chapter restricts a commercial bank in taking any lien on or pledge of any property as additional security for a loan already made in good faith. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1493. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank with a first lien on real property may deal in a junior lien or make a mortgage/deed-of-trust loan, but the loan limits are capped at 90% of the property’s sound market value.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1493. A commercial bank holding a first lien on real property may take, or purchase and hold, or loan upon another and immediately junior lien but all such loans shall not exceed in the aggregate 90 percent of the sound market value of the property as determined by proper appraisal. A commercial bank may loan not to exceed the face value of a deed of trust or mortgage which constitutes a first lien upon real property, but in no event shall any such loan exceed 90 percent of the sound market value of the property covered by said mortgage or deed of trust as determined by proper appraisal. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1494. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may make certain cooperative-housing secured loans if the loan meets the section’s limits and the property is in the state.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1494. A commercial bank may lend on the security of a first security interest on stock or a membership certificate issued to a tenant-stockholder or resident-member by a completed fee simple cooperative housing corporation, as defined in Section 216 of the U.S. Internal Revenue Code, and the assignment by way of security of the borrower’s interest in the proprietary lease or right of tenancy in property issued by such cooperative housing corporation, provided all of the real property owned by such corporation is located within the state, and further provided, that: (a) The term of the loan does not exceed 30 years, is repayable in substantially equal installments (or such variation therefrom as may be authorized under a loan executed pursuant to Section 1916.5 or 1916.8 of the Civil Code), not less often than monthly, with payments commencing not later than 60 days from the date of the loan, and the amount does not exceed 80 percent of the sound market value of such certificates of stock or membership certificates; and (b) The proprietary lease or right of tenancy in the property provides: (1) That no sublease in excess of one year, amendment or modification to such proprietary lease or right of tenancy in the property shall be permitted or created without the lender’s prior written consent, and (2) That in the event of the borrower’s default under such loan, the lender shall have the right, without the prior consent or approval of the cooperative housing corporation, to sell such shares or membership certificates at public or private sale following at least 30 days prior written notice to the borrower and to the cooperative housing corporation, at the address of the premises subject to the proprietary lease or right of tenancy in the property, and assign such proprietary lease or right of tenancy in the property to the purchaser who shall agree as a condition of such assignment to cure any defaults thereunder. For all purposes of this division, such loan shall be considered a secured residential real estate loan and shall be subject to rules and regulations implementing the provisions of this section issued by the commissioner. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.) - 1495. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
A commercial bank may make certain energy-efficiency loans secured by residential real property if the property has no more than four dwelling units and the loan meets the Section 1486-related limits.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1495. (a) A commercial bank may make amortized loans upon the security of residential real property to finance the purchase and installation of material or equipment designed to promote energy conservation or the efficient use of energy in the residential real property securing the loan, if all of the following apply: (1) The residential real property securing the loan consists of not more than four dwelling units. (2) The loan is made in connection with a concurrent loan authorized under Section 1486. (3) The loan is in an amount not to exceed 10 percent of the loan made under the authority of Section 1486. (b) A commercial bank may make additional advances, or additional loans, to an existing borrower in order to finance the purchase and installation of material and equipment designed to promote energy conservation or the efficient use of energy in the residential real property securing the loan, if all of the following apply: (1) The residential real property securing the loan consists of not more than four dwelling units. (2) The aggregate of the additional loan or advance and the unpaid balance of the existing loan will not exceed that percent of the appraised value of the residential real property securing the loan permitted by Section 1486 immediately after the purchase and installation of such material and equipment. (Amended by Stats. 2013, Ch. 334, Sec. 39. (SB 537) Effective January 1, 2014.) - 14950. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. )
Credit unions may make certain member obligations with approval, but they must adopt a board policy for accepting nonmember notes as payment for asset sales, and they may not give nonmembers extra benefits tied only to joining a member credit arrangement.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14950. (a) Every credit union may enter into obligations with its members upon the approval of the credit committee or, in the alternative, the credit manager, subject to the terms and conditions established by the board of directors pursuant to Section 15100. (b) (1) The board of directors of a credit union shall adopt a policy governing the acceptance by the credit union of notes receivable from nonmembers as consideration for the sale of assets owned by the credit union through bona fide transactions. (2) No credit union may accept notes receivable from nonmembers as consideration for the sale of assets owned by the credit union except in accordance with a policy adopted by the board of directors pursuant to paragraph (1). (3) Transactions subject to this subdivision shall not be deemed to be loans to nonmembers for purposes of Section 14750. (c) Notwithstanding subdivision (a), a credit union may permit a nonmember to participate in an obligation or extension of credit to a member as a joint applicant, co-obligor, coborrower, surety, or guarantor. An obligation or extension of credit made pursuant to this subdivision shall not be deemed a violation of subdivision (b) of Section 14800. Except as otherwise permitted by statute or regulation, the credit union shall not extend any other benefit or service of the credit union to the nonmember solely as a result of participation as a joint applicant, co-obligor, coborrower, surety, or guarantor unless the nonmember is thereafter admitted to membership. (Amended by Stats. 2016, Ch. 353, Sec. 8. (AB 2274) Effective January 1, 2017.) - 14952. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union’s board must set a maximum loan amount for members under 18, and the credit union may not lend above that limit unless the member is emancipated or the loan is secured under Section 14955.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14952. (a) The board of directors of a credit union shall establish the maximum amount that the credit union may lend to a member under 18 years of age in any case other than a case (1) where the member is an emancipated minor or (2) where the loan is secured in the manner provided for in Section 14955. (b) No credit union shall make a loan to a member under 18 years of age that will result in the member being obligated to the credit union in excess of the maximum amount established by the board of directors pursuant to subdivision (a) unless the member is an emancipated minor or the loan is secured in the manner provided for in Section 14955. (Amended by Stats. 1998, Ch. 539, Sec. 36.5. Effective January 1, 1999.) - 14953. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. )
If a credit union makes credit above its unsecured-loan limit, the excess must be secured either by property or in the manner set out in Section 14955.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14953. (a) Any extension of credit in excess of the unsecured loan limit set by the board of directors pursuant to Section 15100 shall be secured either (1) by real or personal property to the extent that the extension of credit exceeds such limit, or (2) in the manner provided in Section 14955. (b) If the security offered is an endorsed note as provided in subdivision (a) of Section 14955, a signed and dated financial statement shall be taken from each person who endorses the note and the sufficiency of the financial responsibility of every such endorser shall be verified by a majority of the credit committee. Obligations secured by the signatures of a borrower and endorser or endorsers shall not exceed the amount that may be extended to the borrower without security pursuant to Section 15100, plus an equivalent amount for each endorser; plus the amount of shares or certificates for funds pledged to secure the obligation. (Amended by Stats. 1984, Ch. 209, Sec. 12.) - 14954. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. )
This section defines who is a surety and says a surety may act as security under Section 14955(a).
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14954. For the purposes of this chapter, a person who is not an applicant for an extension of credit or the creation of an obligation with the credit union but guarantees performance of the underlying obligation is a surety. A surety may act as security pursuant to subdivision (a) of Section 14955. (Amended by Stats. 1985, Ch. 951, Sec. 14.) - 14955. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. )
This section defines “security” for credit union loans and says a member may not have to provide further security if the member’s investment equals the loan amount.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14955. “Security” includes, but is not limited to, the following: (a) A note endorsed by any member of the credit union or by any other person. (b) Any obligation wherein the payment of interest and principal is guaranteed by any municipal government, state government, the government of the United States, or by any instrumentality of the United States. (c) The amounts which a member has invested in the credit union, either in the form of shares or in funds received. If the amount invested by a member is equal to the loan made to that member, he shall not be required to give further security. (Added by Stats. 1979, Ch. 112.) - 14957. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. )
If a loan is considered unsafe, the directors, credit committee, or, where applicable, the credit manager may require the borrower to provide extra security.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14957. Whenever the directors, the credit committee, or if applicable, the credit manager, deem any loan unsafe, they may require additional security to be given by the borrower, and if such security is not furnished as required, they may declare the loan due and take action to collect the same. (Amended by Stats. 1983, Ch. 89, Sec. 10.) - 14958. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may participate in federal or state guaranteed loan programs, but only within the loan limits in this division.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14958. A credit union may participate in guaranteed loan programs of the federal or state governments, subject to the limitations on loans set forth in this division. (Added by Stats. 1980, Ch. 52, Sec. 10.) - 14959. Verify source ↗
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. )
A credit union may buy or sell loans made to its members, and may also buy certain loans from another credit union or for secondary-market packaging.
## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 7. Loans [14950 - 15103] ( Chapter 7 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14950 - 14961] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14959. (a) A credit union may do either or both of the following: (1) Purchase, in whole or in part, from any source, loans made to its members. (2) Sell, in whole or in part, to any source, loans made to its members. (b) A credit union may purchase, in whole or in part, either or both of the following: (1) A loan originated by another credit union, which is made to a member of the originating credit union even though the member is not also a member of the credit union purchasing the loan. (2) A loan from any source, if the purchase will facilitate the purchasing credit union’s packaging of a pool of those loans to be sold or pledged on the secondary market. (c) A loan purchase that is authorized by this section shall not be an obligation with a nonmember within the meaning of Section 14750. (Amended by Stats. 2018, Ch. 267, Sec. 8. (AB 2862) Effective January 1, 2019.) - 1496. Verify source ↗
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )
This section says certain liens are not treated as prior encumbrances for first-lien real property tests unless a payment is delinquent, and it sets percentage-based limits for some bond, assessment, and irrigation-project liens.
## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 14. Loans and Investments [1460 - 1522] ( Chapter 14 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Loan Limits [1480 - 1498] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1496. For the purpose of determining whether any loan or investment is secured by a first lien on real property as required by any provision of this division, none of the following shall be deemed a prior encumbrance unless any installment or payment thereunder, other than a rental or royalty under a lease, is due and delinquent: (a) The lien of any tax, assessment, or bond levied or issued by any state or territory of the United States or by any district, political subdivision, or municipal corporation thereof, except the lien of an assessment levied against a particular parcel of real property and of any bond given or issued pursuant to law in lieu of the payment of the assessment. (b) A lien created by a contract and given to secure the payment for water to be furnished under the contract for the irrigation of the real property or any part thereof. (c) A lease of the real property under which all rents or royalties are reserved to the owner. (d) The lien of a bond given or issued pursuant to law in lieu of the payment of an assessment levied against a particular parcel of real property and the lien of any assessment levied to pay that bond, if the unpaid balance of the bond and the amount of the loan or investment combined do not exceed the percentage of the sound market value of the real property permitted to be so loaned or invested by any provision of this division. (e) A lien given to secure the payment of any assessment or subscription to meet the requirements of any law of the United States in respect to any irrigation project of the United States in any state or territory of the United States which may be levied, made, or received by any corporation or association formed to carry out the provisions of that law, if the unpaid balance of the assessment or subscription and the amount of the loan or investment combined do not exceed the percentage of the sound market value of the real property permitted to be so loaned or invested by any provision of this division. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
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