Comparative Digest of Credit Union Acts:

Transcription

1 Credit Union National Association Comparative Digest of Credit Union Acts: Formation and Structure CUNA s State Governmental Affairs 2012 w w w. c u n a. o r g

2 Comparative Digest of Credit Union Acts: Formation and Structure CUNA s State Governmental Affairs TABLE OF CONTENTS CHAPTER 1: OBTAINING A STATE CREDIT UNION CHARTER: REQUIREMENTS 1 CHAPTER 2: AMENDMENTS TO ARTICLES 37 CHAPTER 3: AMENDMENTS TO BYLAWS 50 CHAPTER 4: CREDIT UNION NAME 64 CHAPTER 5: SERVICE FACILITIES 77 CHAPTER 6: FISCAL YEAR 89 CHAPTER 7: OUT OF STATE CREDIT UNIONS 97 CHAPTER 8: CONDUCTING BUSINESS OUT OF STATE 117

3 Comparative Digest of Credit Union Acts: Formation and Structure Obtaining a State Credit Union Charter: Requirements 2011 Model Credit Union Act: ORGANIZATION ALTERNATIVE #1 Section Organization of Credit Union. (1) Any seven or more persons, the majority of which must be residents of this state, of legal age, and within the credit union s field of membership, may organize a credit union by complying with this section. ALTERNATIVE #2 Section Organization of Credit Union. (1) Any seven or more persons of legal age, within the credit union s field of membership, the majority of whom are residents of this state, may organize a credit union by complying with this section. (2) The organizers shall prepare articles of incorporation, in accordance with the rules set forth by the commissioner, and agree to the terms thereof. The articles shall state: (a) The credit union s name, which shall comply with Section 2.50, and the location of the proposed credit union s initial principal office; (b) The par value of membership shares of the credit union; and (c) The names, addresses, and taxpayer identification numbers of the subscribers to the articles. (3) The organizers shall prepare, in accordance with rules set forth by the commissioner, bylaws consistent with this Act for the general governance of the credit union. (4) The organizers shall select an odd number of directors, not less than five, who are eligible for membership and who agree to become members and serve on the board of directors. The persons selected to serve on the board of directors shall execute an agreement to serve in this capacity until the first annual meeting or until the election of their respective successors, whichever is later. (5) The organizers shall forward to the commissioner the chartering fee, if any, a copy of the articles of incorporation, and bylaws. (6) The board of directors may adopt general business corporation provisions that are not inconsistent with the provisions of this Act. Formation and Structure Obtaining a State Credit Union Charter: Requirements 1

4 Comparative Digest of Credit Union Acts * : Formation and Structure Obtaining a State Credit Union Charter: Requirements AL AK AZ AR CA CO CT FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO Name and location Name requires credit union Number of persons required to organize: Common bond Residents of state 1 1 $5 $25 $25 $5 min. $5 $5 $100 $10 min. Par value of shares max. min. $25 min. min. max. max. $100 max. max. Requires qualifications or details on proposed field of membership Forms or Model Documents available: YES YES YES YES YES YES YES YES YES YES YES YES YES Articles of incorporation Bylaws Refers to NCUA s bylaws for federal credit unions MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC TN TX UT VT VA WA WV WI Name and location Name requires credit union Number of persons required to organize: Common bond Residents of state $5 $5 min. $5 $5 $50 $5 min Par value of shares $5 $25 min. min. max. min. $25 max. max Requires qualifications or details on proposed field of membership Forms or Model Documents available: YES YES YES YES YES YES YES YES YES Articles of Incorporation Bylaws Refers to NCUA s bylaws for federal credit unions 1 Allows for majority 2 Also allows for employed 3 Allows for citizens of the state *There are 47 state credit union acts. Delaware, South Dakota, and Wyoming do not have a state credit union act. Formation and Structure - Obtaining a State Credit Union Charter: Requirements CUNA s State Government Affairs

5 Comparative Digest of Credit Union Acts * : Formation and Structure Provisions from State Credit Union Acts Obtaining a State Credit Union Charter: Requirements *There are 47 state credit union acts. Delaware, South Dakota, and Wyoming do not have a state credit union act. Alabama Procedure for organization and incorporation generally. (a) Any seven residents of the state of Alabama may apply to the administrator of the Alabama Credit Union Administration for permission to organize a credit union. (b) A credit union is organized in the following manner: The applicants shall execute in duplicate a certificate of organization by the terms of which they agree to be bound. The certificate shall state: (1) the name and location of the proposed credit union, (2) the names and addresses of the subscribers to the certificate and the number of shares subscribed by each, and (3) the par value of the shares of the credit union, which shall not exceed $25.00 each. They shall next prepare and adopt bylaws for the general governance of the credit union consistent with the provisions of this chapter and shall execute the same in duplicate. The certificate and bylaws, both executed in duplicate, shall be forwarded to the administrator of the Alabama Credit Union Administration. The administrator shall, within 30 days of the receipt of said certificate and bylaws, determine whether they conform with the provisions of this chapter and whether or not the organization of the credit union in question would benefit the members of it and be consistent with the purpose of this chapter. Thereupon the administrator shall notify the applicants of his decision. If it is favorable, he shall issue a certificate of approval, attached to the duplicate certificate of organization, and return the same, together with the duplicate bylaws, to the applicants. The applicants shall thereupon file the said duplicate of the certificate of organization, with the certificate of approval attached thereto, with the judge of probate of the county within which the credit union is to do business, who shall make a record of said certificate and return it, along with his certificate of record attached thereto, to the administrator for permanent record. Thereupon, the applicants shall become and be a credit union, incorporated in accordance with the provisions of this chapter. In order to simplify the organization of credit unions, the administrator shall cause to be prepared an approved form of certificate of organization and a form of bylaws, consistent with this chapter, which may be used by credit union incorporators for their guidance, and on written application of any seven residents of the state, shall supply them without charge with a blank certificate of organization and a copy of said form of suggested bylaws. Alaska Sec Formation of credit union. (a) Seven or more natural persons who desire to form a credit union shall subscribe before an officer competent to administer oaths, articles of incorporation in duplicate that must state (1) the name of the credit union; (2) the location of the credit union and the territory in which it will operate; (3) the names and addresses of the subscribers to the certificate and the number of shares each subscribed; (4) the par value of the shares, which must be a minimum of $5 each; (5) the proposed field of membership specified in detail; (6) the term of the existence of the credit union, which may be perpetual; and (7) the fact that the articles of incorporation are adopted to enable the persons to avail themselves of the advantages of this chapter. (b) The articles of incorporation must also include provisions required by the commissioner for the management of the business of the credit union, for the conduct of its affairs, and relating to the powers of its directors, officers, or stockholders. (c) At the time of presenting the articles of incorporation to the commissioner the incorporators shall also submit proposed bylaws to the commissioner for approval. Except to the extent the articles of incorporation provide the structure and designate the offices, the bylaws shall provide the organizational structure of the credit union and specifically designate those offices that will be held by the executive or managing officers of the credit union. Copies of the original bylaws of the credit union and any amendments of the bylaws shall be filed with the commissioner. (d) The commissioner may prepare form articles of incorporation and form bylaws, consistent with this chapter, which may be used by credit union incorporators and shall be supplied to them on request. Formation and Structure Obtaining a State Credit Union Charter: Requirements 3

6 Arizona Organization procedure A. Any seven or more residents of this state who are of legal age and who have a common bond of interest or association may apply to the superintendent for permission to organize a credit union under this chapter. B. The incorporators shall prepare, adopt and execute a certificate of organization and shall agree to comply with the requirements of the certificate and with all of the laws and rules applicable to credit unions. The certificate shall state: 1. The credit union's name and the location of the proposed principal place of business. 2. That the existence of the credit union is perpetual. 3. The names and addresses of the incorporators and the number of shares subscribed to by each. 4. The purpose for which the credit union is formed. C. The incorporators shall prepare, adopt and execute bylaws consistent with this chapter for the general governance of the credit union. The bylaws, among other things, shall provide: 1. The proposed field of membership which shall be limited to groups having a common bond of interest, occupation or association or to groups within a well-defined neighborhood, community or rural district consistent with the purposes of the credit union. 2. The par value of shares. 3. The number of directors of the credit union, which shall not be fewer than five, all of whom shall be members, together with the titles of the officers and the number of members of the supervisory committee, which shall not be fewer than three. 4. The conditions under which shares may be issued, transferred or withdrawn, loans made and repaid and monies otherwise invested. 5. The number of members of the credit committee, which shall not be fewer than three, or the authorization of a credit manager. D. The incorporators shall select at least five persons who are eligible for membership and who agree to become members and serve on the board of directors, and at least three persons who are eligible for membership and who agree to become members and serve on the supervisory committee. The persons selected to serve on the board of directors and the supervisory committee shall execute an agreement to serve in those capacities until the first annual meeting or until the election of their respective successors, whichever is later. E. The incorporators shall forward to the superintendent such application as is required by the superintendent, along with the application fee provided for in section 6-126, the certificate of organization, the bylaws and the agreements to serve and any additional information which the superintendent may request. F. The incorporators shall not transact any business in the name of the credit union until the certificate of incorporation has been issued by the corporation commission and the application and the bylaws have been approved by the superintendent. Arkansas Procedure for obtaining charter. (a) Any seven (7) or more residents of the State of Arkansas, of legal age, who have a common bond referred to in may organize a credit union and become charter members thereof by: (1) Executing duplicate copies of the articles of incorporation, which shall state: (A) The name, which shall include the words "credit union" and which shall be different from the name of any other existing credit union, and the town or city wherein the proposed credit union is to have its principal place of business; (B) The term of existence of the credit union, which shall be perpetual; (C) The par value of the shares of the credit union, which shall be in one (1) class of five-dollar multiples of not less than five dollars ($5.00) nor more than twenty-five dollars ($25.00); (D) The names and addresses of the subscribers to the articles of incorporation, and the number of shares subscribed by each; and (E) That the credit union shall have the power to exercise such incidental powers as shall be necessary or requisite to enable it to carry on effectively the business for which it is incorporated; (2) Preparing and adopting duplicate copies of bylaws for the general government of the credit union, consistent with the provisions of this chapter; and (3) Forwarding the required charter fee, the articles of incorporation, and the bylaws to the State Credit Union Supervisor. (b) (1) The supervisor shall have the authority to investigate the application for charter to determine whether the proposed credit union meets the objectives of this chapter. (2) The determination for the approval of the application for charter shall be under such rules and regulations as shall be adopted by the supervisor. These rules and regulations shall give account to the number of potential members, their stability of employment or membership in the association comprising the common bond of membership, and the economic characteristics of the proposed common bond. (3) If the supervisor determines that the proposed credit union does not meet these objectives, the charter application shall be denied. If the fee, articles of incorporation, and bylaws conform to the statute, he shall issue a certificate of approval of the articles and return a copy of the bylaws and the articles to the applicant, which shall be preserved in the permanent files of the credit union. (c) The determination for the approval of the application for charter of a central credit union shall be made by the supervisor after an investigation as to the need for the credit union and upon satisfying himself that the objectives of this chapter are met. (d) The subscribers for a credit union charter shall not transact any business until formal approval of the charter has been received. Formation and Structure Obtaining a State Credit Union Charter: Requirements 4

7 (e) In order to simplify the organization of credit unions, the supervisor shall cause to be prepared a form of articles of incorporation and a form of bylaws, consistent with this chapter, which may be used by credit union incorporators for their guidance. (f) The minimum paid-in capital with which a credit union may begin business shall not be less than five thousand dollars ($5,000). (g) The supervisor shall determine that a firm commitment to insure share and deposit accounts has been issued under the provisions of Title II of the Federal Credit Union Act before a charter application can be issued. California The articles of incorporation of every credit union shall set forth the following: (a) The name of the corporation, which shall include the phrase "credit union." (b) (1) The following statement: The purpose of the corporation is to engage in credit union business and any other lawful activities which are not prohibited to a credit union by applicable laws or regulations. (2) By December 31, 2003, each credit union that immediately prior to the enactment of this section was authorized to operate as a credit union shall amend its articles to comply with the provisions of paragraph (1). Notwithstanding Section of the Corporations Code, the amendment of the articles of a credit union as required by paragraph (1) may be adopted by approval of the board alone. (c) The name and address in this state of the corporation's initial agent for service of process in accordance with subdivision (b) of Section 8210 of the Corporations Code. (d) The names and addresses of five or more persons appointed to act as initial directors. Colorado Definitions - organization - charter - investigation. (1) (a) A credit union is a cooperative association, incorporated pursuant to this article for the twofold purpose of promoting thrift among its members and creating a source of credit for them at fair and reasonable rates of interest. (b) As used in this article: (I) "Board" means the financial services board, created in section (I.1) "Commissioner" means the state commissioner of financial services. (II) "Division" means the division of financial services created in section (2) A credit union may be organized in the following manner: (a) Any eight or more residents of the state of Colorado who meet the membership requirements of section (2) may execute, in a number of copies to be specified by the commissioner, articles of incorporation setting forth therein the terms by which they agree to be bound. The articles shall state the name and address of the proposed credit union; the names and addresses of the incorporators; the number of shares subscribed by each incorporator; and the term of existence of the corporation, which may be perpetual. (b) The incorporators shall prepare, in a number of copies to be specified by the commissioner, proposed bylaws for the governing of the credit union, consistent with the provisions of this article, on standard forms approved by the commissioner and shall define therein the proposed eligibility requirements for membership. (c) The proposed bylaws shall further set forth: The classes of shares which the credit union is authorized to issue; if such shares are to consist of one class only, the par value of each of the shares or a statement that all of the shares are without par value, or, if the shares are to be divided into classes, a statement of the par value of the shares of each such class or that the shares are to be without par value. In addition, if the shares are to be divided into classes, the bylaws shall designate each class and a statement of its preferences, its limitations, and its relative rights with respect to the shares of each other class. (3) (a) An application in such form as may be prescribed by the commissioner together with the articles of incorporation and the bylaws shall be filed with the commissioner, in a number of copies to be specified by the commissioner, upon the payment of a filing fee, as determined from time to time by the commissioner, to cover the reasonable and necessary expense to the division attributable to such application. Within thirty days after such filing and payment of such fee, the commissioner shall determine whether the same conform to the provisions of this article and whether such a credit union would benefit the members and proposed members thereof, consistent with the purposes of this article, the general character and fitness of the incorporators, and the economic advisability of establishing the proposed credit union. Except for a community charter application, which application shall be submitted to the board for hearing pursuant to section , the commissioner may approve or deny an application without notice and hearing. (b) The commissioner shall make or cause to be made an investigation to determine whether the incorporators and organizers are qualified and whether their qualifications and financial experience are consistent with their responsibilities and duties. An investigation shall also be conducted to determine if an incorporator or organizer has been convicted of any criminal activity. The commissioner may establish by rule the content of such investigations and what, if any, investigations by other agencies or authorities may be treated as substantially equivalent to and accepted in lieu of an investigation by the commissioner. (4) Upon approval of an application and documents by the commissioner, or by the board with respect to a community charter application, the commissioner shall issue a certificate of approval, in a number of copies equal to the number of copies of the articles of incorporation required to be filed pursuant to subsection (2) (a) of this section as specified by the commissioner, and attach a copy thereof to each copy of the said articles of incorporation. The incorporators shall then file approved articles with the secretary of state, and a copy of the articles, certified by Formation and Structure Obtaining a State Credit Union Charter: Requirements 5

8 the secretary of state, shall be filed with the commissioner. The incorporators shall pay to the secretary of state a fee for filing the articles of incorporation and a fee for certifying the copy of articles of incorporation furnished by the incorporators for filing with the commissioner, both fees to be determined and collected pursuant to section (3), C.R.S. (5) After the said certified copy of articles of incorporation have been filed with the commissioner, he shall issue a charter for such credit union, at which time the credit union shall become a body corporate having the powers enumerated in section , C.R.S., except as otherwise provided or limited in this article. (6) The bylaws approved by the commissioner shall then be adopted by the initial board of directors of the credit union. Connecticut Sec. 36a-437a. Organization. (a) A Connecticut credit union organized under this title shall be subject to the provisions of the laws of this state governing corporations without capital stock, provided the provisions of this title shall prevail over any inconsistent provisions of title 33. (b) Seven or more individuals may file with the commissioner an application to organize a Connecticut credit union, provided each is at least eighteen years of age. The application shall be in writing and shall include (1) a proposed certificate of incorporation on a standard form provided by the commissioner, signed and acknowledged by the organizers either individually or collectively before an officer competent to administer oaths. The proposed certificate of incorporation shall specifically state: (A) The name of the Connecticut credit union; (B) the town in which the main office is to be located; (C) the name, occupation and residence, post office or business address of each organizer, proposed director, proposed appointed director and proposed member of senior management, provided the organizers, proposed directors, proposed appointed directors and proposed senior management shall separately file with the commissioner the notice of the residence of each organizer, proposed director, proposed appointed director and proposed member of senior management whose residence address is not included in the proposed certificate of incorporation; and (D) a statement that the purpose of the Connecticut credit union is to conduct the business of and to engage in any act or activity lawful for a Connecticut credit union, or, in the case of a Connecticut credit union that is organized to provide basic services, a statement that the purpose of such credit union is to offer basic services; (2) the proposed bylaws prescribing the manner in which the business of the Connecticut credit union shall be conducted on a standard form provided without charge by the commissioner, signed and acknowledged by the organizers either individually or collectively before an officer competent to administer oaths; (3) a business plan, including a three-year financial forecast; (4) a potential member survey; (5) in the case of a proposed Connecticut credit union the membership of which is limited to persons within a well-defined community, neighborhood or rural district, evidence to support a finding of such community, neighborhood or rural district; and (6) any other information that the commissioner may require. (c) In connection with an application to organize and at any other time the commissioner requests, each organizer, director and appointed director of a Connecticut credit union shall provide fingerprints to the commissioner for use in conducting criminal history records checks. Such criminal history records checks shall be conducted in accordance with section 29-17a. (d) (1) Upon the filing of the required application, the commissioner shall investigate the facts and shall determine whether: (A) The proposed field of membership is favorable to the success of the Connecticut credit union; (B) the organizers, proposed directors, proposed appointed directors and proposed members of senior management are of such character, general fitness and experience as to warrant belief that the business of the proposed Connecticut credit union will be conducted honestly and efficiently in accordance with the provisions of sections 36a-435a to 36a-472a, inclusive; (C) the proposed certificate of incorporation meets the requirements of this section; and (D) the proposed credit union provides reasonable promise of successful operation. In addition to the determinations under this subdivision, the commissioner shall consider the effect of overlapping fields of membership on the proposed credit union and existing Connecticut credit unions and federal credit unions. As a condition of approval of the application, the commissioner may require the proposed Connecticut credit union to limit or eliminate overlaps to achieve the purposes of sections 36a-435a to 36a-472a, inclusive, and promote the welfare and stability of those credit unions doing business in this state. (2) The commissioner shall not issue a certificate of authority to engage in the business of a Connecticut credit union if, in the opinion of the commissioner, the name selected would tend to confuse the public. (3) If the commissioner determines that the foregoing requirements are satisfied, and that the proposed Connecticut credit union will have its shares and deposits insured by the National Credit Union Administration, or its successor agency, the commissioner shall issue a certificate of authority to engage in the business of a Connecticut credit union. One original of the certificate of incorporation and one original of the certificate of authority shall be filed by the Connecticut credit union with the Secretary of the State. When the certificate of incorporation and certificate of authority are filed with the Secretary of the State in accordance with the provisions of this subsection, the Connecticut credit union shall become a corporation and its corporate existence shall continue perpetually unless otherwise expressly provided by law. (e) Within a reasonable time after issuance of the certificate of authority by the commissioner, the organizers shall hold an organization meeting at which they shall elect directors, who thereafter shall elect officers, appoint committee members and appointed directors, adopt the bylaws, and conduct any other business necessary to complete the organization of the Connecticut credit union. The Connecticut credit union shall complete such organization and shall commence business within six months from the issuance of the certificate of authority by the commissioner or such certificate of authority shall be void. The commissioner may, upon the application of the organizers and for good cause shown, grant a Connecticut credit union a reasonable extension of time to complete such organization and commence business. A Connecticut credit union shall not commence business until its shares and deposits are insured by the National Credit Union Administration or its successor agency, and it has been bonded by a surety company authorized to do business in this state to the same extent such bonding is required by 12 CFR Part 713, as from time to time amended. Formation and Structure Obtaining a State Credit Union Charter: Requirements 6

9 (f) Seven or more individuals may organize a Connecticut credit union that provides basic services in accordance with this section, except a Connecticut credit union the membership of which is limited to persons within a well-defined community, neighborhood or rural district. In order to expedite the issuance of a certificate of authority, the commissioner shall provide, without charge, to such organizers: (1) A model business plan for basic services; (2) policy guidelines concerning shares, lending, investments and other credit union business activities; and (3) sample letters for sponsor support, grants and nonmember deposits, where applicable. If the commissioner makes the determinations required by subsection (d) of this section, the commissioner shall issue a certificate of authority to engage in the business of a Connecticut credit union, with the express restriction that such credit union may offer only basic services. Any credit union organized pursuant to this subsection may upon the approval of the commissioner, convert to a Connecticut credit union operating without the restrictions provided in its certificate of authority. A credit union that proposes to convert shall file with the commissioner a proposed plan of conversion, including a new business plan, an original certificate of amendment to its certificate of incorporation and a certificate by the secretary of the converting credit union that the proposed plan of conversion and proposed certificate of amendment to its certificate of incorporation have been approved by a majority of the governing board of the converting credit union. The commissioner shall approve a conversion under this subsection if the commissioner determines that: (A) The converting credit union has complied with all applicable provisions of law; (B) the converting credit union has net worth in the amount required by the commissioner; (C) the converting credit union has received satisfactory ratings in its most recent safety and soundness examination; and (D) the proposed conversion will serve the necessity and convenience of the members of the converting credit union. After receipt of the commissioner's approval, the converting credit union shall promptly file such approval and the certificate of amendment to its certificate of incorporation with the Secretary of the State. Upon such filing, the converting credit union shall be a Connecticut credit union subject to all the requirements and limitations and possessed of all rights, privileges and powers granted to it by its certificate of incorporation and by the provisions of sections 36a-435a to 36a-472a, inclusive, and shall be subject to all of the duties, relations, obligations, trusts and liabilities of a Connecticut credit union. As used in this section, "basic services" means the issuance of regular shares, the making of signature loans not exceeding amounts predetermined by the commissioner, the making of participation loans as a participant in an amount specified by the commissioner, the sale of money orders and travelers checks, and the issuance and redemption of savings bonds. (g) (1) The certificate of incorporation of a Connecticut credit union may, with the approval of the commissioner, be amended at any time by the adoption at a meeting of an amendment resolution by two-thirds of the directors of the credit union. Written notice of such meeting, together with the text of the proposed amendment shall be given to each director at least seven days prior to the meeting. (2) An original certificate of amendment shall be filed with the commissioner. The certificate of amendment shall set forth: (A) The name of the Connecticut credit union; (B) the amendment; and (C) a statement of the number of directors' votes required to take such action and the number of votes cast in favor of the amendment. (3) The commissioner, upon determining that the certificate of incorporation, as amended, meets the requirements of sections 36a-435a to 36a-472a, inclusive, shall endorse the commissioner's approval thereon, and return the original certificate of amendment to the Connecticut credit union. Upon receipt of the certificate of amendment, the Connecticut credit union shall file the original certificate of amendment with the Secretary of the State, and such amendment shall become effective upon filing. (h) (1) The bylaws of a Connecticut credit union shall specify at least the following: (A) The name of the credit union; (B) the field of membership of the credit union and the qualifications for membership; (C) the par value of shares; (D) the number and terms of directors and appointed directors, if applicable, and procedures for their election or appointment; (E) the duties of the members of senior management; (F) the manner in which a credit committee, credit manager, loan officer or any combination thereof shall be responsible for the credit functions of the credit union; (G) the manner of conducting the annual meeting and the provisions for voting; (H) conditions for payment on, receipt of or withdrawal of shares and deposits; and (I) such other matters as the governing board deems necessary. (2) The bylaws of a Connecticut credit union may not be amended without the written approval of the commissioner for a period of three years following issuance by the commissioner of the certificate of authority to engage in the business of a Connecticut credit union. Thereafter, the bylaws of a Connecticut credit union may be amended in accordance with subdivision (3) of this subsection, provided the bylaws comply with this subdivision, and any such amendment changing the name of the credit union or the field of membership of the credit union shall require the written approval of the commissioner in accordance with subdivision (3) of this subsection. The commissioner's approval shall not be required to amend the field of membership of a Connecticut credit union with a multiple common bond membership to add a group of less than five hundred potential members, excluding members of the immediate family or household of a potential member. (3) The bylaws may be amended by the adoption at a meeting of an amendment resolution by two-thirds of the directors of the credit union. Written notice of the meeting and text of the proposed amendment shall be given to each director at least seven days prior to the meeting. The Connecticut credit union shall file with the commissioner, within ten days after its adoption, one copy of any proposed amendment on a form provided by the commissioner. In the case of a proposed amendment requiring the commissioner's approval, the commissioner shall, within thirty days after such filing, determine whether such proposed amendment is consistent with the provisions and purposes of sections 36a-435a to 36a-472a, inclusive. The thirty-day period may be extended by the commissioner, in writing, if the commissioner determines that the proposed amendment raises issues that require additional information or additional time for analysis. The commissioner, upon determining that such proposed amendment satisfies the requirements of said sections 36a-435a to 36a-472a, inclusive, shall endorse the commissioner's approval on such proposed amendment, and return one copy thereof to the Connecticut credit union. (4) Any amendment to the bylaws of a Connecticut credit union shall become effective when adopted except amendments requiring the approval of the commissioner which shall become effective upon such approval. Formation and Structure Obtaining a State Credit Union Charter: Requirements 7

10 Florida Application for authority to organize a credit union; investigation. (1) The proposed organizers of the proposed credit union shall file with the office an application, upon such form as the commission may, by rule, prescribe. (2) Any five or more residents of this state who represent a limited field of membership may apply to the office for permission to organize a credit union. The fact that individuals within the proposed limited field of membership have credit union services available to them through another limited field of membership shall not preclude the granting of a certificate of authorization to engage in the business of a credit union. (3) The application shall be submitted to the office on forms and in the manner prescribed by rules adopted by the commission and shall be accompanied by a nonrefundable filing fee of $250. Such application shall include: (a) The proposed name and the proposed location where the proposed credit union is to have its principal place of business and where legal service must be served. (b) Designation of the par value of each share of the credit union. (c) Designation of at least five persons who agree to serve on the board of directors, and at least three other persons who agree to serve on the supervisory committee or audit committee, with a signed agreement to serve in these capacities until the first annual meeting or until the election of their successors, whichever is later, executed by those who so agree. (d) Any information required by the commission or office to be submitted to the National Credit Union Administration. (e) Bylaws of the credit union, which bylaws shall be in the form and substance as required by the commission. (4) The office shall have the power of investigation to the extent necessary to make the finding required under this section. (5) The application shall be approved if the office determines that: (a) There is a showing of sufficient interest on the part of the proposed limited field of membership; (b) The qualifications of the proposed board of directors and committee members are such as to indicate a reasonable likelihood that the affairs of the proposed credit union will be administered consistently with applicable laws and sound financial and credit union practices; (c) The organization of the credit union would benefit its members; and (d) The limited field of membership is of sufficient financial viability to indicate reasonable promise of successful operation of the proposed credit union. In determining the financial viability of the proposed limited field of membership and chances for reasonable promise of success of the proposed credit union, the office shall consider: 1. The size of the proposed limited field of membership, excluding potential members based upon familial relationships; and 2. Any other evidence that tends to indicate the reasonable promise of success of the proposed credit union. (6) If the organization of a proposed credit union would result in an overlapping limited field of membership, the office may disapprove the application if it finds that the formation of the proposed credit union will result in a substantial, adverse financial impact to an existing credit union having the same or substantially the same limited field of membership. (7) Concurrently with submission of the application to the office, the applicant shall apply for insurance of accounts with the National Credit Union Administration. (8) The applicant shall not accept any payments for credit to share or deposit accounts, or commence business operations as a credit union, until the certificate of authorization and the insurance certificate have been delivered to the credit union. (9) The office shall perform a preopening examination to verify good faith compliance with all the requirements of law. If the office finds that such requirements have been met, it shall issue and deliver the certificate of authorization to transact business. Any credit union which fails to open for business within 6 months after the issuance of such certificate will forfeit its existence as a credit union, and the certificate of authorization shall be revoked. For good cause shown, the office may extend the opening date for an additional 6 months on its own motion or at the request of the credit union. (10) All preopening costs and expenses in connection with the organization of the credit union and preparation for opening for business may be paid only from funds provided by the organizers or a sponsor. However, the credit union may record, as an operating expense, costs for forms, supplies, insurance, rent, and other expenses applicable to or consumed in the period after opening in accordance with rules adopted by the commission. (11) The commission shall adopt and the office shall provide a form certificate of authorization and bylaws consistent with this chapter which shall be used by applicants for credit unions. Georgia Initial subscribers; contents and filing of articles; other required filings; fee for investigation; selection of initial directors. (a) Any number of persons, not less than eight, having a common bond, as defined in subsection (b) of this Code section, may incorporate for the purpose of organizing a credit union in accordance with this article. The persons so desiring to become incorporated shall execute articles which shall set forth the following: (1) The name of the proposed credit union; (2) The territory in which it will operate; (3) The location where its initial registered office will be located; (4) The names and addresses of the subscribers, their occupation, length of service, and that each has subscribed to one share and paid for same; (5) The names and addresses of the original directors; Formation and Structure Obtaining a State Credit Union Charter: Requirements 8

11 (6) The proposed field of membership specified in detail and having the same common bond as the subscribers; (7) That the purpose and nature of the business are to conduct a credit union with the rights and powers granted by this article; and (8) The term of the existence of the credit union, which shall be perpetual unless otherwise limited. (b) For purposes of this article, "common bond" is described as that specific relationship of occupation, association, or interest; residence within a well-defined neighborhood, community, or rural district; employees of a common employer; or members of a bona fide cooperative, educational, fraternal, professional, religious, rural, or similar organization which tends to create a mutual interest between persons sharing the relationship. Persons related by blood, adoption, or marriage to or living in the same household with a person within such common bond and the surviving spouses of deceased members shall also be considered within the common bond. (c) The subscribers shall file the articles in triplicate with the department together with the fee specified in Code Section The department shall certify one copy of the articles and return it to the subscribers. (d) The subscriber shall file with the department a certificate from the Secretary of State attesting that the name of the proposed credit union has been reserved as authorized by Code Section (e) The subscriber shall file with the department two copies of proposed bylaws setting forth the following: (1) The date of the annual meeting, the manner of conducting the same, the number of members constituting a quorum and regulations as to voting, and the manner of notification of the meeting, which shall comply with Code Section 7-1-6, except that, if the credit union maintains an office and the board of directors so determines, notice of the annual meeting or of any special meeting may be given by posting such notice in a conspicuous place in the office of the credit union at least ten days prior to such meeting; (2) The number of directors, which must be not less than five, all of whom must be members, and their powers and duties, together with the duties of the officers elected by the board of directors; (3) The qualifications for membership of those coming within the initial common bond as required by this article; (4) The conditions under which shares may be issued, paid for, transferred, and withdrawn; deposits received and withdrawn; loans made and repaid; and funds otherwise invested; and (5) The charges which shall be made, if any, for failure to meet obligations punctually; whether or not the credit union shall have the power to borrow; the method of receipting for money; the manner of accumulating a reserve; the manner of determining and paying interest and dividends; and such other matters consistent with this article as may be requisite to the organization and operation of the proposed credit union. (f) The subscriber shall pay such fee as shall be established by regulation of the department to defray the cost of the investigation required by Code Section , provided that the department shall not be required to set such fee if in its judgment the fee would discourage the organization of credit unions under this article. (g) The subscriber shall select at least five qualified persons who agree to serve on the board of directors. A signed agreement to serve in these capacities until the first annual meeting or until the election of their successors, whichever is later, shall be executed by those who so agree and filed with the department along with the proposed bylaws. Hawaii 412: Application for charter. (a) Five or more residents of this State who share a common bond may file an application with the commissioner to engage in the business of a credit union. (b) The application shall contain the following information, unless waived by the commissioner: (1) The proposed name of the credit union; (2) Proposed lease agreements for its principal office; (3) The territory in which the proposed credit union will operate; (4) A business plan; (5) Employment history, education, management experience and other biographical information for all original chartering applicants, and proposed executive officers of the credit union; (6) Proposed policies regarding loans, investments, operations, accounting, recordkeeping, and applicable federal and state consumer laws; (7) Information necessary to conduct a criminal history record check in accordance with section of each of the original chartering applicants and proposed executive officers of the credit union, accompanied by payment of the applicable fee for each record check to be conducted; and (8) Any other information that the commissioner may require. (c) The application shall be submitted on a form prescribed by the commissioner. The application shall be accompanied by a fee as the commissioner shall establish by rule, no part of which shall be refundable. Idaho Organization. Any seven (7) or more residents of the jurisdiction of the state of Idaho, of legal age, who have a common bond referred to in section , Idaho Code, may organize a credit union and become charter members thereof by: (a) Filing an application furnished by the director. (b) Executing in triplicate, articles of incorporation by the terms of which they agree to be bound, which articles shall state: (1) The name, which shall include the words "credit union" and which must clearly indicate the common bond from which members will be taken and which is not the same name as that of any other existing credit union. A credit union may, however, do business in a name which includes only the initials of its name as it appears in its articles of incorporation and the words "credit union," and the city wherein the proposed credit union is to have its principal place of business; Formation and Structure Obtaining a State Credit Union Charter: Requirements 9

12 (2) The term of existence of the credit union, which shall be perpetual; (3) The par value of shares of the credit union, which shall be at least five dollars ($5.00); and (4) The names and addresses of the subscribers to the articles of incorporation, and the number of shares subscribed by each. (c) Adopting bylaws for the general government of the credit union, consistent with the provisions of this chapter and executing the same in triplicate. (d) Forwarding the required application fee, articles of incorporation and the bylaws to the director. If they conform to the statute, he shall endorse the articles of incorporation and return two (2) copies of the endorsed articles of incorporation and two (2) copies of the bylaws to the applicants of the credit union, one (1) copy of which is to be for the credit union's permanent files and the other copy to be filed with the county recorder's office in the county in which the principal place of business is located and with the department of finance. The original copy of the articles of incorporation and bylaws shall be retained by the department of finance. If the director approves or endorses the articles of incorporation, he will issue three (3) charters in original. The director shall have the authority to investigate the application for charter to determine whether the proposed credit union does meet the objectives of this chapter. The determination for the approval of the application for charter shall be under such rules and regulations as shall be adopted by the director. These rules and regulations shall give account to the number of potential members, their stability of employment or membership in the group comprising the common bond of membership and the economic characteristics of the proposed common bond. If, in the opinion of the director, the proposed credit union does not meet these objectives, the charter application shall be denied. (e) The subscribers for a credit union charter shall not transact any business until formal approval of the charter has been received. In order to simplify the organization of credit unions, the director shall cause to be prepared a form of articles of incorporation and a form of bylaws, consistent with this chapter, which shall be used by credit union incorporators for their guidance. (f) The articles of incorporation filed in the department of finance shall be available for inspection and a copy may be provided upon payment of an appropriate fee. Illinois 205 ILCS 305/2. Organization Procedure Sec. 2. Organization Procedure. (1) Any 9 or more persons of legal age, the majority of whom shall be residents of the State of Illinois, who have a common bond referred to in Section 1.1 [205 ILCS 305/1.1] may organize a credit union or a central credit union by complying with this Section. (2) The subscribers shall execute in duplicate Articles of Incorporation and agree to the terms thereof, which Articles shall state: (a) The name, which shall include the words "credit union" and which shall not be the same as that of any other existing credit union in this state, and the location where the proposed credit union is to have its principal place of business; (b) The common bond of the members of the credit union; (c) The par value of the shares of the credit union, which must be at least $ 5.00; (d) The names, addresses and Social Security numbers of the subscribers to the Articles of Incorporation, and the number and the value of shares subscribed to by each; (e) That the credit union may exercise such incidental powers as are necessary or requisite to enable it to carry on effectively the purposes for which it is incorporated, and those powers which are inherent in the credit union as a legal entity; (f) That the existence of the credit union shall be perpetual. (3) The subscribers shall prepare and adopt bylaws for the general government of the credit union, consistent with this Act, and execute same in duplicate. (4) The subscribers shall forward the articles of incorporation, and the bylaws to the Secretary in duplicate, along with the required charter fee. If they conform to the law, and such rules and regulations as the Secretary and the Director may prescribe, if the Secretary determines that a common bond exists, and that it is economically advisable to organize the credit union, he or she shall within 60 days issue a certificate of approval attached to the articles of incorporation and return a copy of the bylaws and the articles of incorporation to the applicants or their representative, which shall be preserved in the permanent files of the credit union. The subscribers shall file the certificate of approval, with the articles of incorporation attached, in the office of the recorder (or, if there is no recorder, in the office of the county clerk) of the county in which the credit union is to locate its principal place of business. The recorder or the county clerk, as the case may be, shall accept and record the documents if they are accompanied by the proper fee. When the documents are so recorded, the credit union is incorporated under this Act. (5) The subscribers for a credit union charter shall not transact any business until the certificate of approval has been received. Indiana IC Persons authorized to organize; application; articles of incorporation Sec. 1. (a) Any seven (7) persons who are residents of Indiana, of legal age, and representing not less than five hundred (500) persons who belong to one (1) or more qualified groups (as defined in section 10 of this chapter) may apply to the department for permission to organize a credit union, by signing and acknowledging, in triplicate, articles of incorporation. Formation and Structure Obtaining a State Credit Union Charter: Requirements 10