Alabama: Credit committee and supervisory committee determined at annual meeting. Credit union bylaws may indicate that the board of directors may carry out duties of the credit committee. Alaska: Board of directors appoints credit committee and supervisory committee Arizona: Board of directors appoints credit committee and supervisory committee. Credit union bylaws may provide for a credit manager instead of a credit committee. Arkansas: Supervisory committee and credit committee elected at annual meeting by the members. California: Supervisory committee and credit manager may be an alternative if allowed in credit union bylaws. Colorado: Credit officer or credit committee, and supervisory committee appointed by board of directors or as determined by bylaws. Connecticut: Supervisory committee. Credit committee determined as specified in bylaws. Credit manager or loan officer or a combination of the two may be an option if allowed for in bylaws. Florida: Supervisory committee elected by membership or appointed by board of directors. Bylaws may allow for audit committee instead of supervisory committee. Credit committee is determined by bylaws. Board of directors may appoint a credit manager instead of a committee. Georgia: Board of directors appoints credit and supervisory committees as indicated in bylaws. Hawaii: Board of directors appoints credit committee if provided for in bylaws. Supervisory committee appointed by board of directors. Idaho: Credit committee and supervisory committee Illinois: Board of directors appoints supervisory committee, credit committee, and membership committee. Indiana: Members determine supervisory committee at annual meeting. Bylaws may provide for credit committee. Iowa: Board of directors appoints credit and audit committee. Kansas: Supervisory committee and credit committee. Kentucky: Board of directors appoints supervisory committee and credit committee. If provided for in bylaws there may be a credit manager in lieu of a credit committee. 1
Louisiana: Supervisory committee. Bylaws provide for credit committee. Maine: Board of directors appoints a credit committee and supervisory committee. Supervisory committee not necessary if annual audit done by an independent public accountant. Credit committee not necessary if board of directors designates loan officers with loans reviewed by full board. Maryland: Supervisory committee. Bylaws may indicate no credit committee Massachusetts: Board of directors appoints audit committee, credit committee, and investment committee. Members of these committees are members of the board of directors. Michigan: Bylaws provide for supervisory and credit committee if duties not fulfilled by board of directors Minnesota: Credit committee and supervisory committee. A credit manager may be appointed and board of directors would be responsible for handling duties of credit committee. Mississippi: Supervisory committee. Credit committee determined by bylaws. Missouri: Credit committee (or credit manager) and supervisory committee. Montana: Supervisory committee appointed by board of directors but bylaws may indicate that is not required. Credit committee appointed by board of directors but bylaws may allow for credit manager in lieu of credit committee. Nebraska: Supervisory committee. Bylaws may provide for credit committee Nevada: Board may appoint an audit committee and credit committee New Hampshire: Supervisory committee. Credit committee determined by bylaws New Jersey: Membership determines examining committee. Bylaws may provide for credit committee New Mexico: Board of directors appoints supervisory committee and other committees as deemed necessary. New York: Board of directors determines supervisory committee. alternative, a credit committee. Bylaws determine the number of loan officers, or in the North Carolina: Board of directors appoints supervisory committee (or if authorized by the bylaws the board may employ outside auditors. Board of directors appoints credit committee (or if authorized by the bylaws, the duties of the credit committee may be carried out by loan officers). North Dakota: Board of directors appoints supervisory committee or may be determined in bylaws. Bylaws determine credit committee. 2
Ohio: Board of directors appoints Supervisory committee unless directed otherwise in regulation or bylaws or articles. The board of directors may instead employ a certified public accountant. Board of directors appoints credit committee or loan officers unless directed otherwise in bylaws or articles. Oklahoma: Board of directors or members appoint credit (credit manager) committee unless provided otherwise by bylaws. Board of directors appoints supervisory committee unless otherwise provided in bylaws. Oregon: Board of directors appoints supervisory committee and credit committee Pennsylvania: Board of directors appoints credit committee and supervisory committee as provided for in bylaws. Rhode Island: Supervisory committee is appointed by board of directors or elected by membership. Bylaws provide for credit committee. South Carolina: Bylaws determine credit committee or loan officer. Supervisory committee elected at annual meeting. Tennessee: Board decides to have supervisory committee. Board decides to have credit committee or loan officer. Texas: Management of credit union requires commissioner approval if not director, officer or employee of credit union. Board of directors may delegate loan approvals to credit committee or loan officers. Utah: Credit committee or credit manager is determined by bylaws. Credit union act provides for supervisory committee Vermont: Board of directors appoints supervisory committee. Credit committee, credit manager, loan officers determined by bylaws. Virginia: Board of directors appoints supervisory committee and credit committee Washington: Supervisory committee elected at annual meeting of membership and credit committee West Virginia: Supervisory committee appointed by board of directors or elected by membership. Board of directors appoints credit committee. Board of directors may serve as credit committee if allowed for in bylaws. Wisconsin: Articles of incorporation, bylaws provide for credit committee 3
Alabama: Credit committee and supervisory committee determined at annual meeting. Credit union bylaws may indicate that the board of directors may carry out duties of the credit committee. 5 17 10. Election of board of directors, credit committee and supervisory committee. At the annual meeting (the organization meeting shall be the first annual meeting), the credit union shall elect a board of directors of not less than five members, a credit committee of not less than three members, and a supervisory committee of three members, all to hold office for such terms respectively as the bylaws provide and until successors qualify. A record of the names and addresses of the members of the board and committees and the officers shall be filed with the administrator of the Alabama Credit Union Administration within 10 days of their election. If, however, the bylaws so provide, the board of directors shall carry out the functions and duties of the credit committee and the credit union shall not elect a credit committee. Alaska: Board of directors appoints credit committee and supervisory committee Sec. 06.45.090. Management of credit union. (a) The business affairs of a credit union are managed by (1) a board of not less than five directors; (2) a credit committee of not less than three members; and (3) a supervisory committee of not less than three members or more than five members. The members of the board of directors shall be elected at the annual members meeting by and from the members. The supervisory committee shall be appointed by the board of directors, and a vacancy in the supervisory committee shall be filled by the board of directors. One of the members of the supervisory committee may be a member of the board of directors, other than the treasurer. The credit committee consists of an uneven number of three or more members appointed by the board of directors for the terms established by the bylaws. Members of the board of directors and of the credit and supervisory committees hold office for terms as the bylaws may provide. (b) A record of the names and addresses of the members of the board, the committees, and the officers of the credit union shall be filed with the commissioner within 10 days after election or appointment. Arizona: Board of directors appoints credit committee and supervisory committee. Credit union bylaws may provide for a credit manager instead of a credit committee 6 532. Election of board A. The board shall consist of at least five directors, to be elected by and from the members. Elections shall be held at the annual meeting or in such other manner as the bylaws provide. All members of the board are entitled to hold office for the terms the bylaws provide, except that terms shall be staggered so that an approximately equal number expire each year, over a three year period. B. At a meeting held within thirty days after each annual election, the board of directors shall appoint a supervisory committee of not fewer than three persons for such terms as the bylaws provide. At the same meeting, the board of directors shall appoint a credit committee, unless the bylaws provide for a credit manager in place of a credit committee. The credit committee shall consist of not fewer than three persons whose terms shall be as the bylaws provide. Within twenty days after the meeting, the credit union shall file with the superintendent a record of the names and addresses of the members of the board and such other committees and officials as required by the superintendent. 4
Within sixty days of any vacancies occurring in the board or supervisory or credit committee, the board shall fill the vacancies in accordance with the bylaws. A record of the names and addresses of members filling any vacancies on the board or the supervisory or credit committee shall be filed with the superintendent within twenty days after their appointment. Arkansas: Supervisory committee and credit committee elected at annual meeting by the members. 23 35 303 23 35 303. Board of directors and committees generally. (a) The business affairs of the credit union shall be managed by a board of directors of not fewer than five (5) directors, a credit committee of not fewer than three (3) members, and a supervisory committee of not fewer than three (3) members, all to be elected at the annual members' meeting by and from the members. (b) All members of the board and of the committees shall hold office for such terms as the bylaws may provide. California: Supervisory committee and credit manager may be an alternative if allowed in credit union bylaws. 14550. Every credit union shall have a supervisory committee of at least three persons, each of whom shall be a member of the credit union. 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. 14601. No member of the credit committee or the credit manager or any loan officer shall serve as a member of the supervisory committee. Colorado: Credit officer or credit committee, and supervisory committee appointed by board of directors or as determined by bylaws. 11 30 108. Elections. At the annual meeting, or by other proper balloting within thirty days before and twenty days after the annual meeting, the credit union members shall elect from the membership a board of directors of not less than five members. A supervisory committee of not less than three members and a credit committee of not less than three members or a credit officer shall be elected by the credit union members or appointed by the board of directors as provided in the bylaws of the credit union. All such persons shall hold office for such terms respectively as the bylaws provide and until successors are elected or appointed and qualify. In addition, one or more alternate members of the credit committee may be elected by the credit union members or appointed by the board of directors to serve in the absence of members of the credit committee. No member shall hold more than one elected office simultaneously. A record of the names and addresses of the members of the board and such committees, such alternates, and the officers shall be filed with the commissioner within twenty days after their election or appointment. 11 30 110. Credit committee credit officer. 5
The credit committee or credit officer shall have the general supervision of all loans to members. Applications for loans shall be on a form approved by the credit committee or the credit officer. At least a majority of the members of the credit committee or the credit officer shall pass and approve or disapprove all loans; except that the credit committee or the credit officer may appoint one or more loan officers and delegate to the same the power to approve or disapprove loans which are within limits prescribed by the credit committee or the credit officer. Each loan officer shall furnish to the credit committee or the credit officer a record of each loan application received by him within seven days after the date of filing of the application. All loans not approved by a loan officer may be considered by the credit committee or the credit officer. No member of the credit committee shall receive any compensation as a loan officer or be employed by the credit union in any other capacity. A credit officer may receive compensation in connection with the performance of his duties. The credit committee shall meet as often as may be necessary after due notice to each member. Vacancies in the credit committee shall be filled pursuant to section 11 30 109 (1) (e). 11 30 111. Supervisory committee. (1) The supervisory committee shall: (a) Make, or cause to be made, a comprehensive annual audit of the books and affairs of the credit union and shall submit a report of the annual audit to the board of directors and a summary of that report to the members at the next annual meeting. The committee shall make or cause to be made such supplementary audits or examinations as it deems necessary. (b) Make an annual report and submit the same at the annual meeting of the members; (c) By unanimous vote of the committee if it deems such action to be necessary for the proper conduct of the credit union, suspend any officer or director of the credit union, or any member of the credit committee, and shall call a special meeting of the members of the credit union not less than seven nor more than fourteen days thereafter to act on such suspension. The members at said meeting may sustain any such suspension and remove any such officer, director, or member of the credit committee permanently and elect a successor thereto for the unexpired term of office or may reinstate any such person. (d) Biennially verify, or cause to be verified, by a random sampling or by verification of all members' accounts, the members' share, deposit, and loan accounts. Such verification may be obtained by either calling in the passbooks, by sending or causing to be sent a statement of account to each member, or by such means as may be specified by the commissioner. (2) By majority vote, the supervisory committee may call a special meeting of the members of the credit union to consider any violation of any provision of this article, the bylaws, or any rule or requirement of the credit union, by any officer, director, member of any committee, or any member, which the committee deems to be detrimental to the credit union. The supervisory committee shall fill vacancies in its own membership until the next annual election of the credit union. Connecticut: Supervisory committee. Credit committee as specified in bylaws. Credit manager or loan officer or a combination of the two may be an option if allowed for in bylaws. Sec. 36a 451a. Supervisory committee. Members. Powers. Duties. (a) The supervisory committee shall consist of not less than three members of the Connecticut credit union, none of whom shall simultaneously serve on the credit committee or as an officer of the Connecticut credit union or be otherwise regularly employed by such credit union, and only one of whom shall simultaneously serve as a director of the Connecticut credit union, and all of whom shall be annually appointed by the governing board and be members in good standing. The supervisory committee shall be responsible for ensuring that members of senior management and directors meet required financial reporting objectives and establish practices and procedures sufficient to safeguard members' assets. To meet its responsibilities, the supervisory 6
committee shall determine whether internal controls are established and effectively maintained, accounting records and financial reports are promptly prepared and accurate, relevant plans, policies and procedures established by the governing board are properly administered, and the governing board's plans, policies, and control procedures are sufficient to safeguard against error, carelessness, conflict of interest, self dealing and fraud. (b) The supervisory committee shall have the sole authority to engage or terminate outside and internal auditors. Upon authorization of the expenses by the governing board, the supervisory committee may engage any assistance necessary for the performance of its duties, including having any audit, examination or verification required by law, regulation or bylaw. Any agreement between the supervisory committee and an outside auditor shall be documented by an engagement letter that specifies the terms, conditions and objectives of the engagement or statement of agreed upon procedures in accordance with this subsection. The supervisory committee shall make or cause to be made a comprehensive annual audit of the books and affairs of the Connecticut credit union, including its assets, liabilities, capital, income and expense accounts and the minutes of all governing board and board appointed committee meetings. Such audit shall cover the period elapsed since the last audit. Any compensated outside auditors performing audits for the supervisory committee shall be independent of the credit union's employees, members of the governing board, member of any board appointed committee, the credit manager and loan officers and members of the immediate families of any of the above. The annual audit shall meet the following minimum guidelines: (1) A Connecticut credit union with total assets of three hundred million dollars or more shall have an opinion audit of the credit union's financial statement performed by an independent licensed public or certified public accountant; and (2) A Connecticut credit union with total assets of less than three hundred million dollars shall have: (A) An opinion audit of its financial statements performed by an independent licensed public or certified public accountant; (B) An agreed upon procedures engagement performed by a person having adequate technical training and proficiency as an auditor commensurate with the level of sophistication and complexity of the credit union under audit, provided if such engagement is not comprehensive, the supervisory committee shall satisfy any remaining requirements of a comprehensive audit in accordance with this subsection; or (C) A comprehensive audit performed by the supervisory committee or the credit union's internal auditors or the internal auditor of another financial institution. (c) The supervisory committee shall perform or cause to be performed a verification of members' accounts at least once every two years through: (1) Verification of share and loan accounts of all members; (2) Statistical sampling of member share and loan accounts done in connection with an opinion audit of the financial statements performed by an independent licensed public or certified public accountant; or (3) A statistical sampling method that results in a random selection that is representative of the membership. (d) The supervisory committee shall make any additional audits and supplemental verifications and examinations of the affairs of the Connecticut credit union that it deems appropriate, or that the governing board or commissioner requires. (e) Promptly following the completion of an audit or other verification or examination, the supervisory committee shall (1) file a written report at the main office of the Connecticut credit union; (2) present the report to the governing board at its next meeting, and a summary thereof to the members at the next annual meeting or if the audit was not performed by the supervisory committee, the outside auditor shall present the report or summary thereof; and (3) file a copy of the written report with the commissioner. (f) The supervisory committee shall provide related working papers, policies and procedures concerning the annual audit, internal audit, examination and verification to the commissioner, upon the commissioner's request, and shall require any independent licensed or certified public accountant, internal auditor or any other auditor to provide such 7
related working papers, policies and procedures concerning the annual audit, internal audit, examination and verification to the commissioner, upon the commissioner's request. The governing board shall require that the auditor submit to such board a signed report of the audit or examination showing the condition of the Connecticut credit union within a reasonable period of time from the effective date of the audit or examination. (g) At any time that the supervisory committee discovers any operating practices of the Connecticut credit union that it deems unsafe which have not been corrected by the governing board, the supervisory committee shall give notice to all credit union members of a special meeting of members to be held for the purpose of receiving the report of the supervisory committee of such operating practices. The membership of the Connecticut credit union shall have, by majority vote, the authority to accept or reject the report of the supervisory committee. The supervisory committee shall take any action the members deem necessary. (h) The supervisory committee shall meet as often as necessary and at least annually and shall keep complete minutes of all of its meetings, including the names of those members present. (i) The supervisory committee shall have the power to suspend at any time, by a two thirds vote of its members at a meeting called for that purpose, any director or employee of the Connecticut credit union or any member of a boardappointed committee for cause. The suspension shall take effect immediately and the commissioner shall be notified promptly of such suspension. Not later than seven business days after the effective date of the suspension, the supervisory committee shall cause notice to be given to all members of the Connecticut credit union of a special meeting of members to be held for the purpose of hearing the report of the supervisory committee regarding the suspension and voting on removal, provided such notice shall not be given if the director, employee or member of a board appointed committee who is subject to suspension resigns. The special meeting shall be held no more than twenty one business days after the date of suspension. The membership of the Connecticut credit union shall have, by majority vote, the authority to accept or reject the report of the supervisory committee. The supervisory committee shall take any action with respect thereto as the members deem necessary. If such action involves removal, the credit union shall promptly notify the commissioner of such removal. Sec. 36a 452a. Credit committee. Credit manager. Loan officer. (a) Except as provided in section 36a 454b, the governing board may delegate, in accordance with its bylaws, all or part of its lending authority to a credit committee, a credit manager who may be but is not required to be a member, loan officers or any combination thereof, who shall review and act on all applications for extensions of credit or for release or substitution of collateral in accordance with the loan policy prescribed by the governing board. (b) If the bylaws of a Connecticut credit union provide for a credit committee, such committee shall consist of an odd number of three or more members of the credit union, none of whom shall simultaneously serve on the supervisory committee and all of whom shall be members in good standing. (c) The credit committee shall meet as often as necessary but at least monthly at a duly noticed meeting. All actions by the committee shall be by majority vote of those members present at any duly noticed meeting at which a quorum is present. A majority of the credit committee shall constitute a quorum. The credit committee shall keep complete minutes of all of its meetings, including the names of those present. The credit manager or loan officer shall provide to the governing board or the credit committee, if any, on at least a monthly basis, a complete listing of all applications for extensions of credit or for release or substitution of collateral that were reviewed and acted upon. (d) A credit manager or loan officer shall not disburse the funds of the Connecticut credit union for any extension of credit approved by such credit manager or loan officer, except for extensions of credit that are secured in full by pledge of the borrowing member's own shares. (e) An applicant for an extension of credit or release or substitution of collateral that has been disapproved by a credit 8
manager or loan officer may appeal to the credit committee or, in the absence of a credit committee, to the governing board. Any such appeal to the credit committee or the governing board shall be acted upon at the next regular meeting of the credit committee or governing board. An applicant for an extension of credit or release or substitution of collateral that has been disapproved by the credit committee, other than an applicant appealing a denial by a credit manager or loan officer, may appeal to the governing board. Any such appeal to the governing board shall be acted upon by the governing board at its next regular meeting. Florida: Supervisory committee elected by membership or appointed by board of directors. Bylaws may allow for audit committee instead of supervisory committee. Credit committee is determined by bylaws. Board of directors may appoint a credit manager instead of a committee. 657.026 Supervisory or audit committee. (1) There shall be a supervisory or audit committee of at least three members, which may be elected by the membership or appointed by the board, or the board may appoint an audit committee of directors in the manner prescribed in the bylaws. An officer or employee may not serve on the supervisory or audit committee. (2) The supervisory or audit committee may audit, or cause to be audited, the financial statements of the credit union to determine compliance with policy, to ensure that generally accepted accounting principles are consistently applied, and to ensure an adequate system of internal controls. (3) The supervisory or audit committee shall: (a) Make or cause to be made a comprehensive annual audit of the credit union, in accordance with the rules of the commission. (b) Make or cause to be made such supplementary audits or examinations as it deems necessary or as are requested by the board of directors or the office. (c) Submit a report of every required audit or examination within a reasonable time to the board of directors with a copy to the office and the National Credit Union Administration. (d) Make a summary report, to the membership at the annual meeting, of any audits or examinations conducted during the preceding year. (4) The supervisory or audit committee shall notify the board of directors, the office, and the National Credit Union Administration of any violation of this chapter, any violation of the certificate of authorization or bylaws of the credit union, or any practice of the credit union deemed by the supervisory or audit committee to materially affect, or which may potentially materially affect, the safety and soundness of the credit union. For the purposes of this subsection, two thirds of the members of the supervisory or audit committee constitutes a quorum. 657.027 Credit committee and credit manager. (1) The board of directors may appoint or the members may elect, as provided in the bylaws, a credit committee composed of at least three members, for such terms as the bylaws provide. (a) The credit committee shall have the general supervision of all applications for credit by members, pursuant to written policies established by the board of directors. (b) The credit committee shall meet as often as the business of the credit union requires and not less frequently than once a month to consider applications for credit. No credit shall be extended unless it is approved by a majority of a quorum of the committee. A quorum shall consist of not less than a majority of the entire committee. (c) The credit committee may appoint one or more loan officers and delegate to them the power to approve or disapprove credit subject to such limitations or conditions as the credit committee prescribes. Credit applications not acted upon by a loan officer shall be reviewed and acted upon by the credit committee. 9
(2) In lieu of a credit committee, the board of directors may provide for a credit manager to approve or disapprove credit under written conditions prescribed by the board and as provided in the bylaws. The board of directors may designate and empower the chief executive officer as the credit manager, or may authorize the chief executive officer to employ a credit manager. In the event a credit manager is designated or employed, the procedures prescribed in subsection (1) do not apply, and no credit shall be extended unless approved by the credit manager; except that the credit manager may appoint one or more loan officers with the power to approve or disapprove credit, subject to such limitations or conditions as prescribed by the chief executive officer. Georgia: Board of directors appoints credit and supervisory committees as indicated in bylaws. 7 1 655. Boards of directors; credit and supervisory committees; officers; oaths of officials; removal from office. (a) At the first annual meeting the members shall elect from among their number a board of directors and at each annual meeting thereafter shall elect successors to the members of the board of directors whose terms of office expire at such annual meeting. (b) Except as this Code section permits the bylaws of a credit union to provide otherwise, members of the board of directors elected at the first annual meeting shall serve until the next annual meeting and until their successors are elected and qualified. A credit union may in its bylaws provide for staggered elections for members of the board of directors; but in that event the bylaws shall provide that as nearly as possible one third of the board shall be elected at each annual meeting. (c) At the organizational meeting and at its first meeting after each annual meeting of the members, the board of directors shall appoint a supervisory committee, credit committee, chairperson, president, secretary, and such other officers consistent with the bylaws as the board deems desirable. No member of the supervisory committee may serve as a member of the credit committee or as an officer, unless the board of directors functions as the credit committee as provided for in subsection (f) of Code Section 7 1 658. (d) The chairman of the credit and supervisory committees shall be appointed by the board from among its number. Both the credit and supervisory committees shall be accountable to the board and members of such committees may be removed by the board. (e) Officers and the committee members elected or appointed at the organizational meeting shall serve until the first annual meeting. Thereafter, the terms of such persons shall be until their successors are chosen or have duly qualified. An officer elected or appointed to fill an unexpired term shall be elected or appointed for the balance of that term. (f) All members of the board and all officers and committee members shall be sworn to perform faithfully the duties of their several offices in accordance with this chapter and the bylaws or as otherwise lawfully established. The oaths shall be subscribed in writing and a copy thereof shall be retained in the minutes of the meetings of the board. (g) Directors may be removed from office as provided in Code Section 7 1 485. Hawaii: Board of directors appoints credit committee if provided for in bylaws. Supervisory committee appointed by board of directors. 412:10 114 Credit committee. (a) If the bylaws provide for a credit committee, the board of directors may appoint or the members may elect a credit committee. The credit committee shall consist of an odd number of members of the credit union, not less than three, but which shall not include more than one loan officer. The bylaws shall specify the number, qualifications, terms and other conditions of service of the credit committee. The board of directors shall fill any vacancies in the credit committee until successors are appointed or elected at the next annual election. 10
(b) The credit committee shall have general supervision of all loans to members, unless that function is delegated to a credit manager. It may approve or disapprove loan applications, subject to written policies established by the board of directors. (c) The credit committee shall meet as often as the credit union's business requires to consider applications for loans or to review the work of the loan officers. A majority of committee members shall constitute a quorum, and except for those loans or lines of credit required to be approved by the board of directors, the vote of a majority present at any duly constituted meeting shall constitute the decision of the committee. 412:10 117 Supervisory committee. (a) Within thirty days following each annual election, the board of directors shall appoint a supervisory committee consisting of no fewer than three and not more than five members, one of whom may be a director other than the treasurer. The bylaws shall specify the qualifications, terms and other conditions of service of the supervisory committee. The board of directors shall fill vacancies in the supervisory committee until successors are appointed after the next annual election. (b) The supervisory committee shall make or cause to be made an annual audit of the books and affairs of the credit union, and such supplementary audits as the board or the commissioner may require; provided that the supervisory committee shall hire a certified public accountant or other qualified person or firm to conduct the audit if any of the following conditions exist: (1) The supervisory committee has not conducted an annual supervisory committee audit; (2) The board of directors or the commissioner deems an outside audit necessary; or (3) The credit union has experienced persistent and serious recordkeeping or accounting deficiencies in violation of the requirements of sections 412:3 108 or 412:3 111 which continue past a usual, expected or normal period of time. The committee shall submit a report of each such audit to the board of directors and upon request, to the commissioner, and a summary of the report to the members at the next annual membership meeting of the credit union. (c) The supervisory committee shall cause the passbooks and accounts of the members to be verified with the records of the credit union from time to time, and not less frequently than once every two years. The supervisory committee shall make or cause to be made such supplementary audits, examinations, and verifications of members' accounts as it deems necessary or as are required by the commissioner or the board of directors, and submit reports of these supplementary audits to the board of directors. Idaho: Credit committee and supervisory committee 26 2118. Credit committee. The credit committee shall have the general supervision of all loans to members. It shall be the duty of the credit committee to review all applications for loans, to ascertain whether or not such loan would be for a provident and productive purpose and would benefit the applicant, and to determine whether or not the security offered, in its judgment, is sufficient and the terms of the application proper. The credit committee shall meet as often as may be required, and at least once each month to review delinquent loans, and shall keep a record of all actions taken at each meeting and shall submit a written report to the members at the annual meetings and to the board monthly. The credit committee, upon approval of the board, may appoint one (1) or more loan officers to act under the supervision of the credit committee and such loan officer, when so appointed, may make loans without necessity for a meeting of or approval by any members of the credit committee, as provided in the bylaws. No more than one (1) member of the credit committee may serve in the position of loan officer. No individual shall have authority to disburse 11
funds of the credit union for any loan which has been approved by him in his capacity as loan officer except that the loan officer may disburse loans approved by him which are fully secured by shares or which do not exceed the credit union's unsecured loan limit set by the board of directors. No member of the credit committee may serve as a member of the board of directors or supervisory committee while serving as a member of the credit committee. 26 2121. Supervisory committee. (a) The supervisory committee shall make or cause to be made, at least annually, an examination of the affairs of the credit union, including an audit of its accounting records and reports; shall submit a written report of its annual examination and audit to the board and to the members at the next annual meeting of the credit union. (b) The supervisory committee shall cause the passbook and accounts of the members to be verified with the records of the treasurer from time to time, and not less frequently than once each year. The term "accounts" shall include any passbook, loan account, statement of accounts, or other pertinent or related record. (c) Additional audits, examinations or verifications of member accounts may be made as deemed necessary by the supervisory committee or as directed by the board of directors. (d) If the annual examination is not conducted by the supervisory committee or is deemed to be unsatisfactory to the director, the board of directors of the credit union may be required by the director to contract for an outside examination acceptable to the director. (e) Notwithstanding any other provision of law to the contrary, the supervisory committee of a state or federally chartered credit union may contract with the Idaho credit union league, or any of its subsidiary organizations, for preparation of any reports the supervisory committee is required by law to submit to the board of directors, and the Idaho credit union league, or its subsidiaries, may perform such function on behalf of the supervisory committee and any report prepared thereby may be accepted by the board of directors or any governmental entity in lieu of any supervisory committee report required under this section. (f) By unanimous vote, the supervisory committee, if it deems such action to be necessary to the proper conduct of the credit union, may suspend any officer, director or member of the committee and call the members together to act on such suspension. The members at said meeting may sustain such suspension and remove said officer permanently or may reinstate said officer. (g) By majority vote the supervisory committee may call a special meeting of the members to consider any matter submitted to it by said meeting. Illinois: Board of directors appoints supervisory committee, credit committee, and membership committee. (1.10) Upon amendment of a credit union's bylaws approved by the members, in all elections for directors, every member who is a natural person shall have the right to cast one vote, regardless of the number of his or her shares, in person or by proxy, for as many persons as there are directors to be elected. (2) The board of directors shall appoint from among the members of the credit union, a supervisory committee of not less than 3 members at the organization meeting and within 30 days following each annual meeting of the members for such terms as the bylaws provide. Members of the supervisory committee may, but need not be, on the board of directors, but shall not be officers of the credit union, members of the credit committee, or the credit manager if no credit committee has been appointed. (3) The board of directors may appoint, from among the members of the credit union, a credit committee consisting of 12
an odd number, not less than 3 for such terms as the bylaws provide. Members of the credit committee may, but need not be, directors or officers of the credit union, but shall not be members of the supervisory committee. (4) The board of directors may appoint from among the members of the credit union a membership committee of one or more persons. If appointed, the committee shall act upon all applications for membership and submit a report of its actions to the board of directors at the next regular meeting for review. If no membership committee is appointed, credit union management shall act upon all applications for membership and submit a report of its actions to the board of directors at the next regular meeting for review. Indiana: Members determine supervisory committee at annual meeting. Bylaws may provide for credit committee. IC 28 7 1 15 Selection of board of directors, supervisory committee, and credit committee; oath; term length; replacement of chief executive officer; qualification criteria Sec. 15. (a) At the annual meeting, the members shall elect a board of directors and a supervisory committee. (b) The bylaws: (1) may provide for a credit committee; and (2) if a credit committee is provided for, must state whether the credit committee is to be elected by the members or appointed by the board of directors. (c) The credit committee must consist of not fewer than three (3) nor more than seven (7) members. A director may not be a member of either the credit committee or the supervisory committee. (d) Each member of the board and each member of the credit committee or the supervisory committee shall take an oath. The length of the term of a member of the board or of the credit committee or the supervisory committee must be set forth in the bylaws. (e) If a credit union replaces the chief executive officer of the credit union, the credit union shall give the department written notice of the replacement not later than thirty (30) days after replacing a person as the chief executive officer. (f) Each individual elected or appointed to serve as a director, supervisory committee member, or credit committee member of a credit union, or as a member of any other committee that performs significant ongoing functions relating to the ongoing operations of the credit union, shall meet all of the following criteria: (1) The individual is a member of the credit union and in good standing according to reasonable criteria established by the credit union board. (2) The individual is acceptable as a bonding risk by a bonding company licensed to do business in this state. (3) The individual has not been removed as a director, officer, committee member, or employee of a financial institution by a federal regulator, a state regulator, or a court with jurisdiction. (4) The department has not removed the individual as a director, officer, committee member, or employee of a credit union, financial institution, or other legal entity under the department's enforcement powers under any law of this state. (5) The individual has not been convicted of a crime involving dishonesty or breach of trust. (6) The individual is not habitually negligent in paying the individual's financial obligations as determined by criteria reasonably established by the credit union board. (7) The individual has not been convicted by a court with jurisdiction of a violation, or found in violation by a court with jurisdiction or the department, of any law of this state enforced or administered by the department. (g) If an individual no longer meets one (1) or more of the requirements of subsection (f) while serving as a director, 13
supervisory committee member, or credit committee member of a credit union, or as a member of any other committee that performs significant ongoing functions relating to the ongoing operations of the credit union, the: (1) individual immediately shall be removed from that office without further action of the members of the credit union board; and (2) credit union shall appoint or elect a replacement to fill the vacancy in the manner described in the bylaws. Iowa: Board of directors appoints credit and audit committee 533.205 Board of directors duties. 1. Within five days following the organizational meeting and each annual meeting, the directors shall elect the following officers from the membership of the board of directors: a. A chairperson of the board. b. A vice chairperson. c. A secretary. d. A chief financial officer whose title shall be designated by the board. 2. a. The board of directors shall appoint the following committees: (1) A credit committee of not less than three members. (2) An auditing committee of not less than three members. b. The board may also appoint alternate members of the credit committee. c. Only a member of the board or a member of the state credit union may be appointed to the credit committee or to the auditing committee. d. The board may appoint an executive committee to act on its behalf. 3. The duties and responsibilities of a director and of the board of directors shall include, but are not limited to, all of the following: a. General management of the affairs of the state credit union. b. Setting the amount of the surety bond that shall be required of all officers and employees handling money. c. Attendance at no less than seventy five percent of the regular board meetings held during the calendar year. d. Periodic review of the original records of the state credit union, or comprehensive summaries prepared by the officers of the state credit union, pertaining to loans, security interests, and investments. e. Review of the adequacy of the state credit union s internal controls. f. Periodic review of utilization of security measures. g. Establishing education and training programs to ensure that the director possesses adequate knowledge to manage the affairs of the state credit union. 4. a. Directors of a state credit union shall discharge the duties of their position in good faith and with that diligence, care, and skill which ordinarily prudent persons would exercise under similar circumstances in like positions. b. The directors have a continuing responsibility to assure themselves that the state credit union is being managed according to law and that the practices and policies adopted by the board are being implemented. 5. a. The board of directors shall name or employ an individual who performs active executive or official duties for the state credit union as its chief executive officer. b. The board shall fix the tenure and provide for the reasonable compensation of the chief executive officer. c. The chief executive officer may be a member of the board of directors. 6. a. The chief executive officer or the chief executive officer s designee shall determine the compensation and tenure of employees of the state credit union. b. An employee of the state credit union shall not be a member of the board of directors. 14
c. For purposes of this section, an employee of the state credit union means an individual employed by the state credit union other than the chief executive officer. 7. A state credit union shall not pay an overdraft of a director, officer, or employee of the state credit union on an account at the state credit union, unless the payment of funds is made in accordance with either of the following: a. A written, preauthorized, interest bearing extension of credit plan that specifies a method of repayment. b. A written, preauthorized transfer of collected funds from another account of the account holder at the state credit union. 8. A credit union director shall not receive compensation for service as a director. However, a director may be reimbursed for reasonable expenses directly related to such service. Kansas: Supervisory committee and credit committee. 17 2208. Officers; board of directors; committees; suspension of members, when. (a) Annually the members of the credit union shall elect members of a board of directors as shall be provided in the bylaws. The bylaws shall state the manner of appointment or election of a supervisory committee and a credit committee. All directors and committee members shall be chosen from the membership. They shall hold their several offices for such terms as may be provided in the bylaws and until their successors are elected or appointed and qualified. (b) Unless the number of members of the credit union is less than 11, no member of the board shall be a member of either of the committees, except the treasurer may serve as a member of the credit committee and one member of the supervisory committee may be a director other than the treasurer. Regular terms of supervisory committee members shall be for such term as shall be provided in the bylaws and until the selection and qualification of their successors. (c) All members of the board and committees and all officers shall be sworn and shall hold their several offices for such terms as may be provided in the bylaws. The oath shall be subscribed by the individual taking it and certified by the officer before whom it is taken and shall immediately be transmitted to the administrator and filed and preserved in the administrator's office. (d) The board of directors may suspend any or all members of the credit and supervisory committees for failure to perform their duties until the next members' meeting, which members' meeting shall be held not less than seven nor more than 21 days after such suspension and at which meeting such suspension shall be acted upon by the members. Kentucky: Board of directors appoints supervisory committee and credit committee. If provided for in bylaws there may be a credit manager in lieu of a credit committee. 286.6 155 Board of directors Supervisory committee Simultaneous appointments prohibited. (1) The credit union shall be directed by a board consisting of an odd number of directors, at least five (5) in number, to be elected at the annual members' meeting by and from the members. All members of the board shall hold office for such terms as the bylaws provide. (2) The board of directors shall appoint a supervisory committee of not less than three (3) persons at the organization meeting held within thirty (30) days following each annual meeting of the members for such terms as the bylaws provide. No member of the board of directors shall be appointed to the supervisory committee. 15