2007 Oregon Code - Chapter 723 :: Chapter 723 - Credit Unions
Chapter 723 —
Credit Unions
2007 EDITION
CREDIT UNIONS
LOAN ASSOCIATIONS AND LENDING INSTITUTIONS
GENERAL PROVISIONS
723.001Â Â Â Â Definitions
723.002Â Â Â Â Short
title
723.006    “Credit
union” defined
723.008    “Credit
union” defined for ORS 723.136 and 723.464 to 723.498
FORMATION
723.012Â Â Â Â Organization
procedure; articles of incorporation; bylaws; fee; rules
723.014Â Â Â Â Denial
of certificate of approval
723.016Â Â Â Â Form
of articles and bylaws
723.022Â Â Â Â Amendment
of articles and bylaws; fee; rules
723.026Â Â Â Â Use
of name exclusive; criminal penalty
723.032Â Â Â Â Places
of business; fee; rules; mobile facilities
723.036Â Â Â Â Fiscal
year
723.042Â Â Â Â Interstate
credit unions
REGULATORY AUTHORITY
723.102Â Â Â Â Rulemaking
authority
723.106Â Â Â Â Reports;
late filing penalty; rules
723.112Â Â Â Â Examinations
723.114Â Â Â Â Annual
fees paid by credit unions
723.116Â Â Â Â Records;
rules
723.118Â Â Â Â Disclosure
of records of department; exemptions
723.122Â Â Â Â Bond
or letter of credit; rules
723.126Â Â Â Â Enforcement
actions
723.132Â Â Â Â Order
to remove officer, director or committee member
723.134Â Â Â Â Receipt
of deposits from person not a member of credit union; secondary capital
accounts; rules
723.136Â Â Â Â Agreements
with other credit union supervisory agencies; contracts for use of credit union
examiners; joint examination or enforcement; fees
POWERS OF CREDIT UNIONS
723.152Â Â Â Â General
powers; rules
723.156Â Â Â Â Exercise
of powers of federal credit union
MEMBERSHIP
723.172Â Â Â Â Credit
union membership; rules
723.176Â Â Â Â Business
and nonbusiness organizations as members
723.182Â Â Â Â Other
credit unions as members
723.184Â Â Â Â State
deemed member with respect to deferred compensation deposits; restrictions on
membership
723.186Â Â Â Â Members
who leave field
723.188Â Â Â Â Foster
parents as members
723.192Â Â Â Â Individual
liability
723.196Â Â Â Â Meeting
of members; mail or electronic ballots
723.202Â Â Â Â Withdrawal
and expulsion of members; request for reinstatement
DIRECTION OF AFFAIRS
723.252Â Â Â Â Election
or appointment of officials
723.256Â Â Â Â Record
of board and committee members
723.262Â Â Â Â Vacancies
723.266Â Â Â Â Compensation
of officials
723.272Â Â Â Â Conflicts
of interest
723.276Â Â Â Â Executive
officers
723.282Â Â Â Â Authority
of directors
723.286Â Â Â Â Executive
committee
723.292Â Â Â Â Meetings
of directors
723.296Â Â Â Â Duties
of directors; delegation of duties
723.302Â Â Â Â Duties
of credit committee
723.306Â Â Â Â Meetings
of credit committee
723.312Â Â Â Â Loan
officers
723.316Â Â Â Â Credit
manager
723.322Â Â Â Â Duties
of supervisory committee; verification of member accounts; rules
723.326Â Â Â Â Suspension
and removal of officials; restrictions on service as director
723.332Â Â Â Â Special
meetings
723.338Â Â Â Â Duty
to notify law enforcement officers of violations of Oregon Credit Union Act;
investigations; costs
ACCOUNTS
723.402Â Â Â Â Shares
723.406Â Â Â Â Dividends
723.412Â Â Â Â Deposit
and deposit certificate accounts; interest; priority
723.426Â Â Â Â Joint
accounts
723.432Â Â Â Â Trust
accounts
723.434Â Â Â Â Share
draft accounts
723.447Â Â Â Â Certified
share drafts
723.450Â Â Â Â Payment
on shares and deposits; restriction on class of shares
723.454Â Â Â Â Liens
723.460Â Â Â Â Reduction
in shares
723.464Â Â Â Â Deposits
made in name of minor
723.466Â Â Â Â Disposition
of deposit on death of depositor
723.468Â Â Â Â Adverse
claim to deposit; notice; restraining order or other process; indemnity bond or
letter of credit
723.470Â Â Â Â Checks
drawn by agents presumed to be in authorized manner
723.472Â Â Â Â Checks
of intoxicated or drugged persons
723.474Â Â Â Â Definitions
for ORS 723.474 to 723.498
723.476Â Â Â Â Application
of ORS 723.478, 723.480 and 723.482; liability and setoff rights of credit
unions
723.478Â Â Â Â Ownership
of multiple-party accounts
723.480Â Â Â Â Multiple-party
accounts; disposition of deposit upon death of party or trustee; effect of will
723.482Â Â Â Â Rights
of survivorship based on form of account; alteration of form of account
723.484Â Â Â Â Transfers
of moneys upon death of depositor or trustee is not testamentary disposition
723.486Â Â Â Â Multiple
party account; payment of deposit to one or more parties; credit union not
required to determine source or use of funds in account
723.488Â Â Â Â Joint
account; payment to any party to account; payment to others
723.490Â Â Â Â P.O.D.
account; payment to any original party; payment to others
723.492Â Â Â Â Trust
account; payment to trustee; payment to others
723.494Â Â Â Â Discharge
of credit union for payments made; conditions
723.496Â Â Â Â Right
of credit union to setoff; amount
723.498Â Â Â Â Designation
of agent for account; powers of agent
LOANS
723.502Â Â Â Â Purposes;
terms
723.506Â Â Â Â Application
723.512Â Â Â Â Loan
limit; exception
723.516Â Â Â Â Installments
723.522Â Â Â Â Line
of credit
723.526Â Â Â Â Other
loan programs
723.532Â Â Â Â Loans
to credit union officials; waiver; rules
723.536Â Â Â Â Loans
to nonmembers; personal liability
INSURANCE AND GROUP PURCHASING
723.572Â Â Â Â Insurance
for members
723.576Â Â Â Â Liability
insurance for director, officer, employee or agent
723.582Â Â Â Â Share
and deposit insurance
723.586Â Â Â Â Group
purchasing
INVESTMENTS
723.602Â Â Â Â Investment
of funds; rules
RESERVE ALLOCATIONS
723.631Â Â Â Â Regular
reserve; reserve for loan losses; rules
723.636Â Â Â Â Charges
to regular reserve
723.646Â Â Â Â Special
reserves; purpose
CHANGE IN CORPORATE STATUS
723.672Â Â Â Â Suspension;
revocation of charter
723.676Â Â Â Â Liquidation
723.682Â Â Â Â Merger
723.686Â Â Â Â Conversion
of charter
CENTRAL CREDIT UNIONS
723.702Â Â Â Â Organization;
name
723.706Â Â Â Â Membership
723.712Â Â Â Â Voting
representative
723.716Â Â Â Â Additional
rights and powers
CORPORATE CENTRAL CREDIT UNION
723.730Â Â Â Â Corporate
central credit union; membership; rights and powers; rules
TAXATION
723.752Â Â Â Â Application
of tax statutes to credit unions
723.756Â Â Â Â Stock
transfer taxes
723.762Â Â Â Â Participation
in government programs
MISCELLANEOUS
723.806Â Â Â Â Notice
to law enforcement officers of violation of Oregon Credit Union Act; exceptions
723.812Â Â Â Â Actions;
assistance
723.816Â Â Â Â Prohibited
acts
723.818Â Â Â Â Giving
false document, statement or report prohibited
723.822Â Â Â Â Cease
and desist orders; contents; effective date; removal or suspension
723.830Â Â Â Â Regulation
of services performed for credit union
723.832Â Â Â Â Application
to credit unions existing on September 13, 1975
723.836Â Â Â Â Effect
of amendment or repeal of Oregon Credit Union Act
723.840Â Â Â Â Limitation
on personal liability for good faith acts or omissions
723.844Â Â Â Â Procedures
for opening safe deposit box after death of person who was sole lessee or last
surviving lessee of box
PENALTIES
723.992Â Â Â Â Criminal
penalties
723.995Â Â Â Â Civil
penalties
GENERAL PROVISIONS
     723.001
Definitions. As used in this
chapter, unless the context requires otherwise:
     (1) “Assets” means property, a right or a
claim with future objectively measurable value that is owned or effectively
controlled by a credit union.
     (2) “Capital” means a credit union’s
reserves, undivided earnings and allowances for loan loss.
     (3) “Corporate central credit union” means
a cooperative organization whose members consist primarily of other credit
unions and whose purposes are:
     (a) To accumulate and prudently manage the
liquidity of its member credit unions through interlending and investment
services;
     (b) To act as an intermediary for member
credit unions to the payment systems and facilitate funds transfers between its
member credit unions and other financial institutions or their agents;
     (c) To obtain liquid funds from other credit
union organizations, financial intermediaries and other sources; and
     (d) To perform such other financial
services that benefit its member credit unions and that are authorized in
writing by the Director of the Department of Consumer and Business Services.
     (4) “Department” means the Department of
Consumer and Business Services.
     (5) “Director” means the Director of the
Department of Consumer and Business Services.
     (6) “Equity” means a credit union’s
reserves and undivided earnings.
     (7) “Home state” means the state in which
the credit union is chartered.
     (8) “Host state” means the state in which
a credit union conducts business, but that is not the home state.
     (9) “Interstate credit union” means a
credit union chartered under the provisions of this chapter or under the
authority of the laws of another state and operating in this state and in one
or more other states.
     (10) “Official” means any of the
following:
     (a) An individual who is or was a director
or officer of the credit union; or
     (b) An individual who is or was a member
of a credit unionÂ’s credit committee or supervisory committee.
     (11) “Regular reserve” means an
irrevocable reserve set aside to cover losses. [1985 c.762 §80; 1987 c.158 §151;
1987 c.373 §62; 1987 c.650 §1; 1993 c.744 §25; 1995 c.319 §7; 1999 c.185 §1]
     723.002
Short title. This chapter
shall be known and may be cited as the “Oregon Credit Union Act.” [1975 c.652 §2;
1985 c.762 §78; 1985 c.801 §1; 1987 c.158 §152; 1987 c.373 §63; 1987 c.650 §2]
     723.006
“Credit union” defined. A
credit union is a cooperative, nonprofit association, incorporated under the
laws of this state, for the purposes of encouraging thrift among its members,
creating a source of credit at a fair and reasonable rate of interest and
providing an opportunity for its members to use and control their own money in
order to improve their economic and social condition. [1975 c.652 §3]
     723.008
“Credit union” defined for ORS 723.136 and 723.464 to 723.498. As used in ORS 723.136 and 723.464 to
723.498, “credit union” means a credit union organized under this chapter, an
interstate credit union doing business in this state or a federal credit union.
[1999 c.185 §18; 2001 c.104 §286]
     723.010 [Amended by 1955 c.550 §1; repealed by 1975
c.652 §88]
FORMATION
     723.012
Organization procedure; articles of incorporation; bylaws; fee; rules. (1) Any seven or more residents of this
state or another appropriate jurisdiction, of legal age, who have a common bond
referred to in ORS 723.172 may organize a credit union and become charter
members thereof by complying with this section.
     (2) The incorporators shall execute the
documents, including the articles of incorporation, required by the Director of
the Department of Consumer and Business Services to apply for a credit union
charter. The 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.
     (b) The location where the proposed credit
union is to have its principal place of business.
     (c) The par value, if any, of the shares
of the credit union shall be defined in the bylaws.
     (d) The full name, residence and
post-office address of each of the incorporators.
     (e) The number of its directors, which
shall not be less than five, and the names of the incorporators who shall be
its directors until the first annual meeting of shareholders.
     (f) The number of members of the
supervisory committee, which shall not be less than three, and the name,
residence and post-office address of the persons who are to serve as members
until the first meeting of directors.
     (3) The incorporators shall prepare and
adopt bylaws for the general government of the credit union, which shall be
consistent with this chapter.
     (4) The incorporators shall forward the
articles of incorporation and the bylaws to the Director of the Department of
Consumer and Business Services, together with a filing fee in an amount that
the director sets by rule. The director shall issue a certificate of approval
if the articles and the bylaws are in conformity with this chapter and the
director is satisfied that the ability of the proposed credit union to operate
successfully is favorable. The director shall return a copy of the bylaws and
the articles to the applicants or their representatives, which shall be
preserved in the permanent files of the credit union. The application shall be
acted upon by the director within 60 days.
     (5) The subscribers for a credit union
charter shall not transact any business until formal approval of the articles
and bylaws has been received. [1975 c.652 §4; 1985 c.762 §85; 1987 c.286 §1;
1999 c.185 §2; 2007 c.343 §1]
     723.014
Denial of certificate of approval. The Director of the Department of Consumer and Business Services may
not issue a certificate of approval under ORS 723.012 if any person named in
the articles of incorporation submitted for approval:
     (1) Is insolvent or bankrupt;
     (2) Has engaged in dishonest, fraudulent
or illegal practices or conduct in any business or profession;
     (3) Has willfully or repeatedly violated
or failed to comply with any provision of the Oregon Bank Act, the Savings
Association Act, the Oregon Credit Union Act, the Oregon Consumer Finance Act,
the Oregon Securities Law, the Oregon Mortgage Lender Law or the Pawnbrokers
Act, or any administrative rule or order adopted pursuant to any such Act;
     (4) Has been convicted of a crime, an
essential element of which is fraud;
     (5) Is not qualified to conduct a credit
union business on the basis of such factors as training, experience and
knowledge of the business;
     (6) Is permanently or temporarily enjoined
by a court of competent jurisdiction from engaging in or continuing any conduct
or practice involving any aspect of the credit union business;
     (7) Is the subject of an order of the
director subjecting the person to a fine or other civil penalty, or removing
the person from an office in any entity regulated by the director; or
     (8) Is the subject of an order entered
within the past five years subjecting the person to a fine or other civil
penalty or removing the person from an office in a state banking institution, a
national bank, a state or federal credit union, a state or federal savings
association or a consumer finance company, or from a position as a securities
broker or dealer, a state or federal investment adviser or a mortgage lender,
that was issued by the regulatory authority of another state, or of the federal
government, with authority over such banking institutions, credit unions, consumer
finance companies, savings associations, securities firms or mortgage lenders. [1977
c.135 §42; 1985 c.762 §86; 1987 c.373 §63a; 1987 c.650 §3; 1999 c.185 §3]
     723.016
Form of articles and bylaws.
In order to simplify the organization of credit unions, the Director of the
Department of Consumer and Business Services 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.
The articles of incorporation and bylaws shall be available without charge to
persons desiring to organize a credit union. [1975 c.652 §5; 1985 c.762 §87]
     723.020 [Repealed by 1975 c.652 §88]
     723.022
Amendment of articles and bylaws; fee; rules. (1) The articles of incorporation or the bylaws may be amended as
provided in the bylaws. Amendments to the articles of incorporation or bylaws
shall be submitted, together with a fee established by rule of the Director of
the Department of Consumer and Business Services, to the director, who shall
approve or disapprove the amendments within 30 days.
     (2) Amendments shall become effective upon
approval in writing by the director. [1975 c.652 §6; 1991 c.635 §1; 1999 c.185 §4]
     723.026
Use of name exclusive; criminal penalty. With the exception of a credit union organized under this chapter or
of any other credit union act, or an association of credit unions or a
recognized chapter thereof, any person using a name or title containing the
words “credit union” or any derivation thereof or representing themselves in
their advertising or otherwise as conducting business as a credit union shall
be fined not more than $500 or imprisoned not more than one year, or both, and
may be permanently enjoined from using such words in its name. [1975 c.652 §7;
1985 c.762 §88]
     723.030 [Amended by 1973 c.414 §1; repealed by 1975
c.652 §88]
     723.032
Places of business; fee; rules; mobile facilities. (1) A credit union may establish a place of
business or change the credit unionÂ’s place of business within this state upon
written notice to the Director of the Department of Consumer and Business
Services.
     (2) A credit union may establish
additional places of business upon written application to the director. The
application shall be accompanied by a fee in an amount that the director sets
by rule. The fee shall be paid only with applications for the establishment of
new places of business. Except as provided in subsection (3) of this section,
mobile facilities described in subsection (3) of this section are considered
new places of business. The fee is not required to be paid with applications
relating to the acquisition or relocation of existing places of business. The
director may approve or disapprove the application. If the director does not
disapprove an application within 30 days after a completed application is
received, the application shall be considered approved.
     (3) A credit union may establish one or
more mobile facilities to engage in credit union operations. Mobile facilities
of a credit union having the membership described in ORS 723.172 (2)(a) may
operate in this state or in other states. Mobile facilities of a credit union
having the membership described in ORS 723.172 (2)(b) may operate only within
the well-defined local community, neighborhood or rural district served by the
credit union. An application and fee are not required under this section for
mobile facilities that exercise permissible credit union powers or engage in
permissible credit union activities but that do not accept deposits.
     (4) The director may limit or restrict the
ability of a credit union to establish additional places of business upon
written notice to the credit union if the director determines that the safety
and soundness of the credit union would be adversely affected by any addition.
     (5) A credit union may share office space
with one or more credit unions and contract with any person or corporation to
provide facilities or personnel. [1975 c.652 §8; 1977 c.135 §44; 1991 c.635 §3;
1997 c.832 §1; 1999 c.185 §55; 2005 c.95 §1; 2007 c.343 §2]
     723.036
Fiscal year. The fiscal year
of each credit union shall end on the last day of December. [1975 c.652 §9]
     723.040 [Amended by 1959 c.106 §1; 1971 c.681 §1;
repealed by 1975 c.652 §88]
     723.042
Interstate credit unions.
(1) A credit union chartered under this chapter may operate in another state
unless prohibited by the laws of the other state.
     (2) A credit union organized under the
laws of another state may conduct business as a credit union in this state with
the approval of the Director of the Department of Consumer and Business
Services under the conditions described in subsection (3) of this section.
     (3) The director may issue a branch
certificate to a credit union chartered in another state for the purposes of
operating in this state if all of the following conditions are met:
     (a) The credit union is organized under a
credit union law substantially similar to this chapter;
     (b) The credit union files an application
that includes an agreement to comply with all rules prescribed by the director;
     (c) The credit union agrees to submit an
annual or other regular report of examination from the supervising agency of
the state in which it is chartered;
     (d) The credit union agrees to authorize
the examination of its parent credit union by the director and to pay the fee
determined under ORS 723.114;
     (e) The field of membership of the credit
union meets the definition of membership as defined in ORS 723.172;
     (f) The credit union acknowledges that
laws of this state relating to consumer protection apply to transactions with
residents of this state;
     (g) The credit union has account insurance
comparable to that required for credit unions incorporated under this chapter;
     (h) The credit union designates and
maintains an agent for the service of process in this state; and
     (i) The credit union submits quarterly
financial reports as required by the director.
     (4) The director may suspend or revoke the
certificate of any credit union for which
     723.050 [Amended by 1955 c.550 §2; 1959 c.106 §2;
repealed by 1975 c.652 §88]
     723.060 [Amended by 1971 c.681 §2; repealed by 1975
c.652 §88]
     723.070 [Repealed by 1975 c.652 §88]
     723.080 [Repealed by 1975 c.652 §88]
     723.090 [Repealed by 1975 c.652 §88]
     723.100 [Amended by 1955 c.550 §3; repealed by 1975
c.652 §88]
REGULATORY
AUTHORITY
     723.102
Rulemaking authority. In
accordance with ORS chapter 183, the Director of the Department of Consumer and
Business Services may adopt rules for the purpose of carrying out this chapter.
[1975 c.652 §11; 1985 c.762 §90; 1991 c.331 §123; 1991 c.635 §4; 1999 c.185 §6]
     723.104 [1977 c.135 §43; repealed by 1985 c.762 §196]
     723.106
Reports; late filing penalty; rules. (1) Credit unions shall report to the Director of the Department of Consumer
and Business Services annually by a date established by the director on forms
supplied and in the manner specified by the director for that purpose.
Additional reports may be required.
     (2) A fine in an amount to be established
by rule of the director, but not to exceed $1,000 for each day a report is in
arrears shall be levied against the offending credit union unless it is excused
for cause by the director. [1975 c.652 §12; 1991 c.635 §2; 1999 c.185 §7]
     723.110 [Amended by 1971 c.681 §3; repealed by 1975
c.652 §88]
     723.112
Examinations. (1) The
Director of the Department of Consumer and Business Services shall examine each
credit union to determine its condition and whether the credit union is
complying with the laws of this state and such other matters as the director
may prescribe. For the purpose of conducting an examination or any part
thereof, the director may employ an independent consultant determined by the
director as qualified to conduct examinations. Except as provided in subsection
(3) of this section, examinations under this subsection must be conducted not
less frequently than 24 months apart.
     (2) For purposes of an examination under
subsection (1) of this section:
     (a) Each credit union and all of its
officers and agents shall be required to give to representatives of the
director full access to all of the credit unionÂ’s books, papers, securities,
records and other sources of information under their control.
     (b) The director may subpoena witnesses,
administer oaths, compel the giving of testimony and require the submission of
documents.
     (3) Instead of an examination under
subsection (1) of this section, the director may accept an examination or
report made by an agency of the United States Government under statutes of the
     (4) A report of an examination under
subsection (1) of this section shall be forwarded to the executive officer of
each credit union within 60 days after completion. The report shall contain
comments relative to the management of the affairs of the credit union and also
as to the general condition of its assets. Within 45 days after the receipt of
the report, the directors and supervisory committee members shall meet to
consider matters contained in the report and shall report in writing to the director
on the manner in which the credit union is complying or will comply with the
director’s recommendations. [1975 c.652 §13; 1977 c.135 §45; 1985 c.762 §91;
1987 c.373 §63c; 1999 c.185 §8]
     723.114
Annual fees paid by credit unions. (1) Each credit union shall pay to the Director of the Department of
Consumer and Business Services each year the fee determined by reference to the
schedule adopted by the director under ORS 705.620. The fee shall be paid by
the date set by the director in the rule establishing the schedule.
     (2) In addition to any fee collected under
subsection (1) of this section, whenever the director devotes any extra
attention to the affairs of a credit union, either upon determination by the
director or upon request of the credit union, the fee for the extra service
shall be the actual cost thereof. [1985 c.762 §92; 1987 c.171 §6; 1987 c.373 §64]
     723.116
Records; rules. A credit
union shall maintain all books, records, accounting systems and procedures in
accordance with such rules as the Director of the Department of Consumer and
Business Services from time to time prescribes. In prescribing such rules, the
director shall consider the relative size of a credit union and its reasonable
capability of compliance. [1975 c.652 §14; 1991 c.635 §5; 1999 c.185 §9]
     723.118
Disclosure of records of department; exemptions. (1) The Director of the Department of
Consumer and Business Services shall receive and file in the Department of
Consumer and Business Services all reports required under this chapter.
     (2) Except as provided in subsection (3)
of this section, the records of the department pertaining to the administration
of this chapter are available for public inspection unless the director
determines in the particular instance that the public interest in disclosing
the records is outweighed by the interests of the credit union or its
directors, members, officers or employees in keeping the records confidential,
or that the records are exempt from disclosure under ORS 192.501 to 192.505. A
determination by the director under this subsection is subject to review under
ORS 192.410 to 192.505.
     (3) Except as provided in subsections (4)
and (5) of this section, the following records of the department are exempt
from disclosure or production and shall be treated as confidential as provided
in ORS 705.137:
     (a) Examination reports and work papers,
directives, orders and correspondence that relate to examination reports.
     (b) Investigatory information concerning
persons subject to investigation by the director under ORS 723.014 or 723.132
and financial statements of those persons.
     (c) Proprietary information.
     (d) Reviews of financial statements
submitted to the director.
     (e) The name of a member or borrower and
the amount of shares, deposits or debts of a member or borrower.
     (4) Notwithstanding subsection (3) of this
section and except as otherwise provided in this subsection, the director may
disclose any record of the department specified in this subsection pertaining
to a credit union that has been liquidated under ORS 723.676 if the director
determines in the particular instance that the public interest in disclosing
the record outweighs the interests of the credit union or its directors,
members, officers or employees in keeping the record confidential. The director
may not disclose any record or portion of a record that contains any
proprietary information or any information relating to the individual financial
activities or affairs of persons unless the director concludes that those
activities or affairs were a direct and substantial contributing factor in the
failure of the credit union. This subsection applies to the following records
of the department:
     (a) Examination reports and work papers,
directives, orders and correspondence that relate to examination reports.
     (b) Investigatory information concerning
persons subject to investigation by the director under ORS 723.014 or 723.132.
     (c) Reviews of financial statements.
     (d) Reports filed under ORS 723.106.
     (5) Notwithstanding ORS 40.270, an officer
of the department may be examined concerning records that are exempt from
disclosure under subsection (2) or (3) of this section and the records are
subject to production if the court before which a civil or criminal action is
pending finds that the examination and production is essential for establishing
a claim or defense. In making a finding under this subsection, if the court
views the records, the court shall do so in camera.
     (6) All records of the department
pertaining to the condition of credit unions may be furnished to:
     (a) The National Credit Union
Administration.
     (b) The Federal Home Loan Bank of which
the credit union is a member or to which the credit union has applied for
membership.
     (c) The State Treasurer if the credit
union is a depository of public fund deposits.
     (d) The respective credit union.
     (7) If the director is requested to
disclose any record subject to this section and the record contains both
material that is exempt from disclosure under this section or any other provision
of law and material that is not exempt from disclosure, the director shall
separate the exempt and nonexempt material and may disclose only the nonexempt
material. [2005 c.95 §3]
     723.120 [Amended by 1959 c.106 §3; 1971 c.681 §5;
1973 c.719 §1; repealed by 1975 c.652 §88]
     723.122
Bond or letter of credit; rules. (1) Each credit union shall obtain and maintain a fidelity bond or
irrevocable letter of credit issued by an insured institution, as defined in
ORS 706.008, which includes coverage in accordance with any rules of the
Director of the Department of Consumer and Business Services, to protect the
credit union against losses caused by occurrences covered therein such as
fraud, dishonesty, forgery, embezzlement, misappropriation, misapplication of
duty and all acts of its agents, directors, officers, committee members,
employees or attorneys. The minimum amount of the bond or letter of credit
shall be determined based on the amount of the credit unionÂ’s total assets in
accordance with the following table:
______________________________________________________________________________
Assets                                                             Minimum
Amount
                                                                       of
Bond
                                                                       or
Letter of Credit
$0 to $10,000Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Coverage
equal to
                                                                       the
credit unionÂ’s
                                                                       assets.
$10,001 to
$1,000,000Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $10,000
for each
                                                                       $100,000
or
                                                                       fraction
thereof.
$1,000,001 to
$50,000,000Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $100,000
plus
                                                                       $50,000
for each $1
                                                                       million
or fraction
                                                                       thereof
over $1
                                                                       million.
$50,000,001 to
$295,000,000Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $2.55
million plus
                                                                       $10,000
for each $1
                                                                       million
or fraction
                                                                       thereof
over $50
                                                                       million.
More than
$295,000,000Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $5
million.
______________________________________________________________________________
     (2) Each bond or letter of credit shall
include a faithful performance clause to cover the chief financial officer.
Each bond or letter of credit shall be approved by the director who may require
such additional amounts as the director considers necessary.
     (3) All bond claims or claims upon a
letter of credit that exceed one percent of the credit unionÂ’s reserves and
undivided earnings or that are related to the errors or omissions of an
officer, director or committee member shall be reported to the director. [1975
c.652 §15; 1987 c.286 §2; 1991 c.331 §124; 1995 c.319 §1; 1997 c.249 §216; 1997
c.631 §542; 1997 c.832 §2; 1999 c.185 §10; 2001 c.308 §1]
     723.124 [1971 c.681 §4; repealed by 1975 c.652 §88]
     723.126
Enforcement actions. The
Director of the Department of Consumer and Business Services may institute any
action or other proceeding that the director considers necessary for enforcing
any provision of this chapter or any rule, order or action adopted, issued or
taken by the director under this chapter. [1987 c.215 §10]
     723.128 [1971 c.681 §12; repealed by 1975 c.652 §88]
     723.130 [Amended by 1955 c.550 §4; 1967 c.279 §1;
1971 c.681 §6; repealed by 1975 c.652 §88]
     723.132
Order to remove officer, director or committee member. The Director of the Department of Consumer
and Business Services by order may direct a credit union to remove any officer,
director or committee member of the credit union for any reason stated in ORS
723.014. [1987 c.650 §6]
     723.134
Receipt of deposits from person not a member of credit union; secondary capital
accounts; rules. (1) The
Director of the Department of Consumer and Business Services by rule may
establish guidelines for determining whether a credit union predominantly
serves low-income members. If the director, using the guidelines established in
accordance with this subsection, determines that a credit union predominantly
serves low-income members, the credit union may:
     (a) Receive deposits from a person that is
not a member of the credit union and allow the person to hold shares in the
credit union; and
     (b) Issue secondary capital accounts that
are subject to any terms and conditions that the Director of the Department of
Consumer and Business Services may prescribe by rule.
     (2) For purposes of this section, “secondary
capital account” means a deposit or share account that is not insured by the
National Credit Union Share Insurance Fund, or another primary share insurer
approved by the Director of the Department of Consumer and Business Services,
and that is subordinate to all other claims against the credit union, including
claims of creditors, owners of share accounts and the National Credit Union
Share Insurance Fund or another insurer approved by the Director of the
Department of Consumer and Business Services. Secondary capital accounts that
the credit union issues in accordance with this section are equity as defined
in ORS 723.001 for the purposes of ORS 723.631 and for any other purpose.
     (3) The powers set forth in this section
are in addition to the powers the credit union has under ORS 723.152. [2007
c.343 §5]
     723.135 [1973 c.148 §2; repealed by 1975 c.652 §88]
     723.136
Agreements with other credit union supervisory agencies; contracts for use of
credit union examiners; joint examination or enforcement; fees. (1) The Director of the Department of
Consumer and Business Services may enter into cooperative, coordinating and
information sharing agreements with any other credit union supervisory agency
or any organization affiliated with or representing one or more credit union
supervisory agencies with respect to the periodic examination or other
supervision of any branch or other office or place of business in this state of
any non-Oregon institution, or any branch of a credit union that is chartered
in Oregon and is located in any other state. The director may accept the
supervisory agencyÂ’s reports of examination and reports of investigation in
lieu of conducting the directorÂ’s own examinations or investigations. The
agreement may resolve conflicts of laws and specify the manner in which
examination, supervision and application processes shall be coordinated between
this state and the home state of the non-Oregon institution. The director may
also share information with the Federal Home Loan Bank and its directors.
     (2) The director may enter into contracts
with any credit union supervisory agency that has concurrent jurisdiction over
a credit union operating a branch or other office or place of business in this
state, to engage the services of such agencyÂ’s examiners at a reasonable rate
of compensation, or to provide the services of the directorÂ’s examiners to such
agency at a reasonable rate of compensation. Any such contract shall be deemed
exempt from competitive bidding requirements under the provisions of ORS
279.835 to 279.855 and ORS chapters 279A and 279B. The contract may resolve
conflicts of laws and specify the manner in which examination, supervision and
application processes shall be coordinated between this state and the home
state of the non-Oregon institution.
     (3) The director may enter into joint
examinations or joint enforcement actions with other credit union supervisory
agencies that have concurrent jurisdiction over any branch or other office or
place of business in this state of a non-Oregon institution, or any branch of a
credit union that is chartered in Oregon and is located in any other state,
provided that the director may at any time take the actions independently if
the director deems the actions to be necessary or appropriate to carry out the
directorÂ’s responsibilities or to ensure compliance with the laws of this
state. In the case of a non-Oregon institution, the director may recognize:
     (a) The exclusive authority of the credit
union supervisory agency of the home state of the non-Oregon institution over
corporate governance matters; and
     (b) The primary responsibility of the
credit union supervisory agency of the home state of the non-Oregon institution
over safety and soundness matters.
     (4) Any fees collected by the director
from non-Oregon institutions under the provisions of this chapter may be shared
with other credit union supervisory agencies or any organization affiliated
with or representing one or more credit union supervisory agencies in
accordance with agreements between such parties and the director. [1999 c.185 §39;
2003 c.794 §324]
POWERS OF CREDIT
UNIONS
     723.152
General powers; rules. In
addition to the powers conferred by the general corporation law a credit union
may, subject to the restrictions and limitations contained in this chapter and
the credit unionÂ’s bylaws:
     (1) Make contracts.
     (2) Sue and be sued.
     (3) Adopt, use and alter a common seal.
     (4) Acquire, lease, hold and dispose of
property, either in whole or in part, necessary or incidental to the credit
unionÂ’s operations.
     (5) At the discretion of the board of
directors, require any person admitted to membership to pay an entrance fee or
annual membership fee, or both.
     (6) Receive savings from members of the
credit union in the form of various classes of shares, deposits or deposit
certificates, deposit accounts or special-purpose thrift accounts.
     (7) Receive from members of the credit
union or from another credit union deposits or deposit certificates, deposit
accounts or various classes of shares payable on nonnegotiable request.
     (8) Lend the credit union’s funds to
members of the credit union and to other credit unions as provided in this
chapter.
     (9) Acquire and lease personal property at
the request of a member of the credit union who wishes to lease the property on
terms requiring payment, during the term of the lease, of rents that exceed the
total expenditures made by the credit union for the acquisition, ownership,
financing and protection of the property. Rents may include residual value
payments that are the obligation of a responsible third party.
     (10) Borrow from any source in accordance
with policy established by the board of directors and issue debentures pursuant
to a plan approved by the Director of the Department of Consumer and Business
Services. The debentures shall be subordinate to the shares and deposits of the
credit union.
     (11) Discount and sell any eligible
obligations, subject to rules adopted by the Director of the Department of
Consumer and Business Services.
     (12) Sell all or substantially all of the
credit unionÂ’s assets or purchase all or substantially all of the assets of
another credit union, subject to the approval of the Director of the Department
of Consumer and Business Services.
     (13) Invest surplus funds as provided in
this chapter.
     (14) Make deposits in legally chartered
banks, savings banks, savings and loan associations, trust companies and credit
unions.
     (15) Assess charges to a member of the
credit union in accordance with the credit unionÂ’s bylaws for the memberÂ’s
failure to meet the memberÂ’s obligations to the credit union promptly.
     (16) Hold membership in other credit
unions organized under this chapter or other state or federal laws, and in
other associations and organizations composed of credit unions.
     (17) Declare dividends, pay interest on
deposit and deposit certificate accounts and pay interest refunds to borrowers
as provided in this chapter.
     (18) Offer products and services
reasonably related to the purposes of a credit union as set forth in ORS
723.006.
     (19) Receive deposits from the federal
government or this state, or any agency or political subdivision thereof.
     (20) Make donations or contributions to
any civic, charitable, political or community organization as authorized by the
board of directors.
     (21) Act as a custodian of qualified
pension funds of members of the credit union if permitted by federal law.
     (22) Purchase or make available insurance
for the credit unionÂ’s directors, officers, agents, employees and members.
     (23) Allow members of the credit union to
use share accounts, deposit accounts or deposit certificate accounts as share
draft accounts as provided in ORS 723.434.
     (24) Provide digital signature
verification or other electronic authentication services to members of the
credit union.
     (25) Act as trustee or custodian for
members of the credit union under any written trust instrument or custodial
agreement in connection with a tax-advantaged savings plan authorized under the
Internal Revenue Code, including but not limited to individual retirement,
deferred compensation, education savings and health savings accounts, provided
that the trust instrument or custodial agreement requires all funds subject to
the instrument or agreement to be invested exclusively in share or deposit
accounts in the credit union. The State of
     (26) Indemnify the directors, officers,
employees and committee members or other volunteers of the credit union in
accordance with the provisions of the credit unionÂ’s articles, bylaws and the
indemnification provisions of ORS chapter 60.
     (27) Sell negotiable checks, including
travelerÂ’s checks, money orders and other money transfer instruments, including
domestic and international electronic funds transfers, to persons eligible for
credit union membership under ORS 723.172, whether or not such persons are
members of the credit union.
     (28) For a fee, cash checks and money
orders and send or receive domestic and international electronic funds
transfers for persons eligible for credit union membership under ORS 723.172,
whether or not such persons are members of the credit union. The fee a credit
union may charge for cashing checks or money orders in accordance with this
subsection may not exceed the following amounts, as appropriate:
     (a) For a check or money order issued by
the federal government or an agency of the federal government, by this state or
an agency of this state, by any other state or political subdivision thereof or
by the government of the municipality in which a person is cashing the check or
money order, or for a check that is a payroll check drawn against an account
held in a financial institution in this state:
     (A) $5 or two percent of the face value of
the check or money order, whichever is greater, if the person cashing the check
or money order provides valid and current government-issued photo
identification; or
     (B) $5 or 2-1/2 percent of the face value
of the check or money order, whichever is greater, if the person cashing the
check or money order does not provide valid and current government-issued photo
identification.
     (b) For a check or money order not
described in paragraph (a) of this subsection:
     (A) $5 or three percent of the face value
of the check or money order, whichever is greater, if the person cashing the
check or money order provides valid and current government-issued photo
identification; or
     (B) $5 or 3-1/2 percent of the face value
of the check or money order, whichever is greater, if the person cashing the
check or money order does not provide valid and current government-issued photo
identification.
     (29) Exercise other powers that are
necessary to carry out the credit union’s purpose. [1975 c.652 §16; 1981 c.290 §3;
1983 c.37 §36b; 1985 c.762 §93; 1985 c.801 §2; 1987 c.650 §4; 1999 c.185 §11;
2001 c.104 §287; 2001 c.308 §2; 2003 c.405 §10; 2005 c.95 §4; 2007 c.343 §3]
     723.156
Exercise of powers of federal credit union. Notwithstanding any other provision of law, a credit union may, upon
prior approval by the Director of the Department of Consumer and Business
Services and subject to any limitations prescribed by the director, exercise
any of the powers conferred upon a federally chartered credit union doing
business in this state that is subject to the regulations of the administrator
of the National Credit Union Administration or the successor or successors of
the administrator, if the director finds that the exercise of the power:
     (1) Serves the public and members’
convenience and advantage; and
     (2) Equalizes and maintains the quality of
competition between state chartered credit unions and federally chartered
credit unions. [1975 c.652 §17; 1991 c.635 §6; 1997 c.832 §3]
MEMBERSHIP
     723.172
Credit union membership; rules.
(1) The membership of a credit union shall be limited to and consist of the
incorporators to the articles of incorporation and such other persons within
the common bond set forth in the bylaws as have been duly admitted members,
have paid the required entrance fee or membership fee, or both, have subscribed
for one or more shares and have paid the initial installment thereon, and have
complied with such other requirements as the articles of incorporation or
bylaws specify.
     (2) Credit union membership may include:
     (a) One or more groups, each having a
common bond of occupation or association; or
     (b) Persons who live or work in, or
organizations located within, a well-defined local community, neighborhood or
rural district.
     (3) Credit union membership may also
include any of the immediate family of a person who is eligible for membership
in the credit union under subsection (2) of this section.
     (4) For purposes of this section, a “well-defined
local community, neighborhood or rural district” shall consist of one or more
adjacent precincts, districts, cities, counties or other boundaries defined by
the state or a unit of local government or by any state or local government
agency.
     (5) In determining whether adjacent
precincts, districts, cities, counties or other boundaries defined by the state
or a unit of local government or by any state or local government agency form a
well-defined local community, neighborhood or rural district, the Director of
the Department of Consumer and Business Services shall consider:
     (a) Any interaction or shared interests
that tie the precincts, districts, cities, counties or other boundaries
together;
     (b) The size of the population of the
proposed well-defined local community, neighborhood or rural district;
     (c) The size of the geographic area of the
proposed well-defined local community, neighborhood or rural district; and
     (d) Any other criteria that the director
considers relevant in accordance with the purposes of this chapter.
     (6)(a) A credit union may not add a group
with a separate bond of occupation or association to its membership unless, at
the time the group is added to the membership of the credit union, the group
does not contain more than 3,000 members.
     (b) The limitation in paragraph (a) of
this subsection does not apply to:
     (A) Any group the director determines
could not feasibly or reasonably establish a new credit union due to a lack of
volunteer resources, financial resources or other factors the director
considers important to the likelihood of the successful formation of a new
credit union; or
     (B) Any group transferred to the credit
union in connection with a merger, consolidation or transfer approved by the
director, or in connection with the liquidation of another credit union.
     (7) Notwithstanding subsection (2) of this
section, a credit union whose membership includes one or more groups, each
having a common bond of occupation or association, may add to its membership
persons who live or work in, or organizations located within, a well-defined
local community, neighborhood or rural district if:
     (a) The director determines that the
well-defined local community, neighborhood or rural district is underserved by
other depository institutions, as defined in section 19(b)(1)(A) of the Federal
Reserve Act (12 U.S.C. 461(b)(1)(A)), based on data of the National Credit
Union Administration and the federal banking agencies, as defined in section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813); and
     (b) The credit union establishes and
maintains an office or facility in the well-defined local community,
neighborhood or rural district at which credit union services are available.
     (8) In reviewing a proposed amendment to a
credit unionÂ’s bylaws that would include an additional group within the credit
unionÂ’s membership, the director shall consider:
     (a) Whether, within the preceding year,
the credit union has engaged in any unsafe or unsound practice that is
material;
     (b) Whether the credit union has the
capitalization, administrative capability and financial resources to serve the
additional group; and
     (c) Other factors the director may
prescribe by rule. [1975 c.652 §18; 1999 c.730 §1]
     723.176
Business and nonbusiness organizations as members. Business and nonbusiness organizations
composed of individuals who are eligible for membership, or whose employees are
eligible for membership, may be admitted to membership in the same manner and
under the same conditions as individuals. [1975 c.652 §19; 1987 c.286 §3; 1999
c.185 §56; 2001 c.308 §3]
     723.182
Other credit unions as members.
Any credit union organized under the laws of this state may permit membership
of any other credit union organized under the laws of this state, of any other
state or of the
     723.184
State deemed member with respect to deferred compensation deposits; restrictions
on membership.
Notwithstanding any other provision of this chapter, a credit union may receive
deposits from the State of
     723.186
Members who leave field.
Members who leave the field of membership may be permitted to retain their
membership in the credit union as a matter of general policy of the board of
directors. [1975 c.652 §21]
     723.188
Foster parents as members.
(1) Notwithstanding any other provision of this chapter, a credit union that
provides in its articles of incorporation or bylaws for membership of employees
of the State of
     (a) Serving as a foster parent in a foster
home certified by the Department of Human Services under ORS 418.625 to
418.645; and
     (b) Maintaining a developmental disability
child foster home certified by the Department of Human Services under ORS
443.830 and 443.835.
     (2) A person eligible for membership in a
credit union under subsection (1) of this section shall comply with all other
membership requirements applicable to any other person eligible for membership
in the credit union. [1989 c.550 §2; 1999 c.59 §226; 1999 c.316 §9]
     723.192
Individual liability. The
members of the credit union shall not be personally or individually liable for
the payment of the debts of the credit union. [1975 c.652 §22; 1981 c.903 §10]
     723.196
Meeting of members; mail or electronic ballots. (1) The annual meeting and any special
meetings of the members of the credit union shall be held at the time and place
and in the manner indicated by the bylaws.
     (2) At meetings described in subsection
(1) of this section, a member has one vote, irrespective of the amount of that
memberÂ’s shareholdings. A member may not vote by proxy, but a member may vote
by mail or electronic ballot if allowed by the bylaws of the credit union. The
board of directors shall establish procedures to safeguard the confidentiality
and integrity of the voting process. As used in this subsection, “electronic”
has the meaning given that term in ORS 84.004.
     (3) The board may establish a minimum age
as a qualification of eligibility to vote at meetings of the members. [1975
c.652 §23; 1999 c.185 §12; 2005 c.95 §5]
     723.202
Withdrawal and expulsion of members; request for reinstatement. (1) Subject to subsection (2) of this
section, a credit union may expel any member of the credit union who:
     (a) Has not carried out the member’s
engagements with the credit union;
     (b) Has been convicted of a criminal
offense;
     (c) Fails to comply with the provisions of
this chapter or of the credit unionÂ’s articles, bylaws or policies;
     (d) Threatens, harasses or abuses any
member, employee, board or committee member or agent of the credit union; or
     (e) Habitually neglects to pay the member’s
debts or becomes insolvent or bankrupt.
     (2) A credit union that expels a member
shall inform the member in writing of the reasons for the expulsion and give
the expelled member reasonable opportunity to request the credit unionÂ’s board
of directors to reinstate the member. Members of a credit union who withdraw or
are expelled shall not be relieved of any liability to the credit union. The
amounts paid in on shares or deposited by such members, together with any
dividends credited to their shares and any interest which has accrued on their
deposits, shall be repaid to them in the order of their withdrawal or
expulsion, as funds become available therefor, but the credit union may deduct
from such payments any sums due to the credit union from such members. [1975
c.652 §24; 1985 c.762 §94; 1999 c.185 §13; 2007 c.343 §6]
     723.210 [Repealed by 1975 c.652 §88]
     723.220 [Repealed by 1959 c.106 §23]
     723.230 [Amended by 1959 c.106 §7; 1967 c.279 §2;
1971 c.681 §7; repealed by 1975 c.652 §88]
     723.240 [Amended by 1959 c.106 §8; 1967 c.279 §3;
repealed by 1975 c.652 §88]
     723.245 [1959 c.106 §6; repealed by 1975 c.652 §88]
     723.250 [Amended by 1959 c.106 §9; 1967 c.279 §4;
1971 c.681 §8; 1973 c.147 §1; repealed by 1975 c.652 §88]
DIRECTION OF
AFFAIRS
     723.252
Election or appointment of officials. (1) The credit union shall be directed by a board consisting of an odd
number of directors, at least five in number, to be elected by and from the
members in the manner provided in the credit unionÂ’s bylaws. 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 members at the organizational
meeting and within 30 days following each annual meeting of the members for
such terms as the bylaws provide.
     (3) The board of directors shall appoint a
credit committee consisting of an odd number, not less than three in number,
for such terms as the bylaws provide, or said credit committee may be elected
at the annual membersÂ’ meeting by and from the members, or in lieu of a credit
committee, a credit manager may be appointed.
     (4) The board of directors may appoint
alternate directors, credit committee or supervisory committee members to serve
in place of absent officials. [1975 c.652 §25; 1997 c.832 §4]
     723.256
Record of board and committee members. Within such time as the Director of the Department of Consumer and
Business Services may establish, a record of the names and addresses of the
members of the board, committees and all officers of the credit union shall be
filed with the director on forms provided and in the manner prescribed by the
director. [1975 c.652 §26; 1991 c.635 §7; 1999 c.185 §14]
     723.260 [Amended by 1959 c.106 §10; repealed by 1975
c.652 §88]
     723.262
Vacancies. (1) Subject to
subsection (2) of this section, the board of directors may fill any vacancies
occurring in the board until successors elected at the next annual meeting have
qualified.
     (2) If a vacancy occurring in the board
reduces the number of directors to five or fewer, the board shall fill the
vacancy until a successor elected at the next annual meeting has qualified.
     (3) The board shall also fill vacancies in
the credit and supervisory committees or in the office of credit manager. [1975
c.652 §27; 2005 c.95 §6]
     723.266
Compensation of officials.
No officer, director, or committee member, other than the treasurer, a credit
manager, a general manager, or a loan officer may be compensated for service as
such, but providing reasonable life, health, accident and similar insurance
protection for a director or committee member, or indemnification and related
insurance, shall not be considered compensation. Directors and committee
members, while on official business of the credit union, may be reimbursed for
necessary expenses incidental to the performance of such business. [1975 c.652 §28;
1991 c.635 §8]
     723.270 [Repealed by 1975 c.652 §88]
     723.272
Conflicts of interest. No
director, committee member, officer, agent or employee of the credit union
shall in any manner, directly or indirectly, participate in the deliberation
upon or the determination of any question affecting pecuniary interest or the
pecuniary interest of any corporation, partnership or association (other than
the credit union) in which the director, committee member, officer, agent or
employee is directly or indirectly interested. [1975 c.652 §29]
     723.275 [1959 c.106 §5; repealed by 1975 c.652 §88]
     723.276
Executive officers. (1) At
their organizational meeting and within 30 days following each annual meeting of
the members, the directors shall elect an executive officer, who may be
designated as chairperson of the board or president; a vice chairperson of the
board or one or more vice presidents; a treasurer; and a secretary. The
treasurer and the secretary may be the same individual. The persons so elected
shall be the executive officers of the corporation.
     (2) The terms of the officers shall be one
year, or until their successors are chosen and have duly qualified.
     (3) The duties of the officers shall be prescribed
in the bylaws.
     (4) The board of directors may employ an
officer in charge of operations whose title shall be president, general
manager, or such other title as may be designated in the bylaws of the credit
union; or, in lieu thereof, the board of directors may designate the treasurer
or an assistant treasurer to be in active charge of the affairs of the credit
union.
     (5) The board of directors may appoint a
security officer. [1975 c.652 §30; 1987 c.286 §4; 1991 c.635 §9]
     723.280 [Amended by 1955 c.550 §5; 1959 c.106 §11;
1971 c.681 §9; repealed by 1975 c.652 §88]
     723.282
Authority of directors. The
board of directors shall have the general direction of the business affairs,
funds and records of the credit union. [1975 c.652 §31]
     723.286
Executive committee. From
the persons elected to the board, the board may appoint an executive committee
of not less than three directors who may be authorized to act for the board in
all respects, subject to such conditions and limitations as are prescribed by
the board. [1975 c.652 §32]
     723.290 [Amended by 1959 c.106 §12; repealed by 1975
c.652 §88]
     723.292
Meetings of directors. The
board of directors shall meet at least monthly. [1975 c.652 §33; 1999 c.185 §15]
     723.296
Duties of directors; delegation of duties. (1) The board of directors shall manage the business and affairs of
the credit union. The duties of the board include, but are not limited to, the
duties listed in this section. The board may not delegate duties listed in
subsection (2) of this section. The board may delegate the duties listed in
subsection (3) of this section to a committee, officer or employee of the
credit union, who shall provide appropriate information to the board regarding
the exercise of the duties.
     (2) The board shall:
     (a) Establish the requirements for
membership in the credit union, including the par value, if any, of a share;
     (b) Declare dividends on shares and share
certificates as provided by the bylaws;
     (c) Authorize interest refunds, if any, to
members from income earned and received in proportion to the interest paid by
them on classes of loans and under conditions that the board prescribes;
     (d) Authorize the employment of persons
necessary to carry on the business of the credit union and fix the compensation
of the manager or chief executive officer;
     (e) Authorize the conveyance of property;
     (f) Suspend members of the credit or
supervisory committee for failure to perform their duties;
     (g) Appoint any special committees the
board considers necessary;
     (h) Perform other duties as the members of
the credit union from time to time direct, and perform or authorize any action
not inconsistent with this chapter and not specifically reserved by the bylaws
for the members;
     (i) Limit the number of shares and the amount
of deposits that may be owned by a member and ensure that limitations adopted
under this subsection apply alike to all members; and
     (j) Establish policies and controls
regarding the investment of surplus funds.
     (3) In addition to the duties listed in
subsection (2) of this section, and subject to subsection (1) of this section,
the board shall:
     (a) Act upon applications for membership.
If this duty is delegated, a record of an approval or denial of membership must
be made available to the board. A person denied membership by a committee,
officer or employee of the credit union may appeal the denial to the board.
     (b) Purchase a blanket fidelity bond, in
accordance with ORS 723.122.
     (c) Determine from time to time the
interest rate or rates that shall be charged on loans.
     (d) Determine the prospective dividend
rate to be paid on shares and share certificates and the interest rate or rates
that will be paid on deposits and deposit certificates.
     (e) Designate a depository or depositories
for the funds of the credit union.
     (f) Borrow or lend money to carry out the
functions of the credit union. [1975 c.652 §34; 1981 c.412 §7; 1985 c.762 §95;
1985 c.801 §3; 1987 c.286 §5; 1997 c.832 §5; 2005 c.95 §7]
     723.302
Duties of credit committee.
The credit committee shall have the general supervision of all loans to
members. [1975 c.652 §35]
     723.306
Meetings of credit committee.
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
loans. No loan shall be made unless it is approved by a majority of the
committee who are present at the meeting at which the application is
considered. [1975 c.652 §36]
     723.312
Loan officers. (1) The
credit committee may appoint one or more loan officers and delegate the power
to approve or disapprove loans, subject to such limitations or conditions as
the credit committee prescribes.
     (2) Loan applications not approved by a
loan officer may be reviewed by the credit committee. [1975 c.652 §37; 1987
c.286 §6]
     723.316
Credit manager. The credit
committee may be dispensed with, and a credit manager empowered to approve or
disapprove loans under conditions prescribed by the board of directors. In the
event the credit committee is dispensed with, the procedures prescribed in ORS
723.302 to 723.312 do not apply, and no loans shall be made unless approved by
the credit manager, except the credit manager may appoint one or more loan
officers with the power to approve loans, subject to such limitations or
conditions as the credit manager prescribes. [1975 c.652 §38]
     723.322
Duties of supervisory committee; verification of member accounts; rules. (1) The supervisory committee shall 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 audit to the board of directors
and the Director of the Department of Consumer and Business Services and a
summary of that report to the members at the next annual meeting of the credit
union. It shall make or cause to be made such supplementary audits or
examinations as it deems necessary or as are required by the director or by the
board of directors, and submit reports of these supplementary audits to the
board of directors.
     (2) The supervisory committee shall cause
the accounts of the members to be verified with the records of the credit union
from time to time in accordance with subsection (3) of this section. This
verification shall be done not less frequently than every two years.
     (3) Verification of members’ accounts
shall be made using either of the following methods:
     (a) A controlled verification of 100
percent of membersÂ’ share and loan accounts; or
     (b) A controlled random statistical
sampling method in accordance with rules that the director may prescribe.
     (4) Records of accounts verified shall be
maintained and retained until the next verification of membersÂ’ accounts is
completed. [1975 c.652 §39; 1991 c.635 §10]
     723.326
Suspension and removal of officials; restrictions on service as director. (1) The supervisory committee by a unanimous
vote may suspend any member of the credit committee and shall report such
action to the board of directors for appropriate action.
     (2) The supervisory committee by a
unanimous vote may suspend any officer or member of the board until the next
membersÂ’ meeting. The next membersÂ’ meeting must be held not less than 14 nor
more than 45 days after the suspension. At the meeting the members shall decide
whether to remove the suspended officer or board member.
     (3) Any member of the supervisory
committee may be removed by the board for failure to perform duties prescribed
in this chapter or in the credit unionÂ’s articles of incorporation, bylaws or
policies.
     (4) A person may not serve as a director
if the person has defaulted on payment of a voluntary obligation to the credit
union or has otherwise caused the credit union to incur a financial loss. [1975
c.652 §40; 1985 c.762 §96; 1999 c.185 §16; 2005 c.95 §8]
     723.332
Special meetings. The supervisory
committee by a majority vote may call a special meeting of the members to
consider any violation of this chapter, the articles of incorporation or
bylaws, or any practice of the credit union deemed by the supervisory committee
to be unsafe or unauthorized. [1975 c.652 §41; 1985 c.762 §97]
     723.338
Duty to notify law enforcement officers of violations of
     (2) If the matter is referred to the
Attorney General or to a district attorney, such official promptly shall
investigate the violation and institute such action against the person as the
information and investigation requires or justifies. The cost of the
investigation and action shall be paid by the county or state in the manner in
which other criminal actions are paid. [1979 c.88 §33]
     723.350 [Amended by 1959 c.106 §13; repealed by 1975
c.652 §88]
     723.360 [Amended by 1959 c.106 §14; repealed by 1975
c.652 §88]
     723.370 [Amended by 1959 c.106 §15; repealed by 1975
c.652 §88]
     723.380 [Amended by 1959 c.106 §16; repealed by 1975
c.652 §88]
     723.390 [Amended by 1959 c.106 §17; 1971 c.681 §10;
1973 c.719 §2; repealed by 1975 c.652 §88]
     723.400 [Amended by 1955 c.550 §6; 1959 c.106 §18;
1967 c.279 §5; repealed by 1975 c.652 §88]
ACCOUNTS
     723.402
Shares. (1) Shares may be
subscribed to, paid for and transferred in such manner as the bylaws prescribe.
     (2) A certificate need not be issued to
denote ownership of a share in a credit union. [1975 c.652 §42; 1985 c.801 §4;
1987 c.158 §153; 1987 c.650 §7]
     723.406
Dividends. (1) At such
intervals and for such periods as the board of directors may authorize, and
after provision for the required reserves, the board of directors may declare
dividends to be paid on shares or share certificates. Dividends may be paid at
various rates, or not paid at all, with due regard to the conditions that
pertain to each class of share.
     (2) Subject to the approval of the board
of directors, accounts closed between dividend periods may be credited with
dividends at the rate set by the board of directors. [1975 c.652 §43; 1985 c.206
§1; 1985 c.801 §5; 1995 c.319 §2; 2001 c.308 §4]
     723.410 [Amended by 1959 c.106 §19; 1967 c.279 §6;
repealed by 1975 c.652 §88]
     723.412
Deposit and deposit certificate accounts; interest; priority. (1) A credit union may receive savings in
deposit and deposit certificate accounts from its members and other credit
unions, subject to such conditions as the board of directors establishes.
     (2) Deposit and deposit certificate
accounts differ from shares and share certificates in that a predeclared rate of
return, as determined from time to time at such rates and upon such classes of
deposit and deposit certificate accounts as are established by the board of
directors, shall be established on deposit accounts.
     (3) Interest may be paid on deposits and
deposit certificates at various rates with due regard to the conditions that
pertain to each type of account such as minimum balance, notice and time
requirements.
     (4) In the event of liquidation of a
credit union, shares and share certificates shall be subordinate to the claims
of depositors and other creditors. [1975 c.652 §44; 1985 c.801 §8]
     723.416 [1975 c.652 §45; repealed by 1999 c.185 §58]
     723.420 [Repealed by 1959 c.106 §23]
     723.422 [1975 c.652 §46; repealed by 1999 c.185 §58]
     723.426
Joint accounts. A member may
designate any person or persons to hold shares, deposits and thrift club
accounts with the member in joint tenancy, with or without the right of
survivorship, but no joint tenant, unless a member in the memberÂ’s own right,
shall be permitted to vote, obtain loans, or hold office or be required to pay
an entrance or membership fee. [1975 c.652 §47; 1977 c.555 §16; 1991 c.635 §11]
     723.430 [Repealed by 1975 c.652 §88]
     723.432
Trust accounts. Shares may
be issued and deposits may be held in the name of a member in trust for a
beneficiary, including a minor, but no beneficiary, unless a member in the
beneficiaryÂ’s own right, shall be permitted to vote, obtain loans, hold office
or be required to pay an entrance or membership fee. [1975 c.652 §48; 1977
c.555 §17]
     723.434
Share draft accounts. (1) A
credit union may allow a member holding a regular share or deposit account to
use that account as a share draft account as provided in this section, subject
to conditions established by the board of directors.
     (2) As used in this section:
     (a) “Share draft” means a negotiable or
nonnegotiable draft used to withdraw shares or deposits from a share draft
account.
     (b) “Share draft account” means any
regular share account or deposit account from which the credit union allows
shares or deposits to be withdrawn by means of a share draft or other order.
     (3) The terms “share draft” and “share
draft account” may encompass accounts whether the underlying account is a share
account or a deposit account, without changing the type of account. [1981 c.290
§2; 1983 c.37 §36c; 1999 c.185 §40]
     723.436 [1975 c.652 §49; renumbered 723.454]
     723.440 [Repealed by 1975 c.652 §88]
     723.441
[1985 c.804 §6; repealed by
1987 c.491 §9]
     723.442 [1975 c.652 §50; 1981 c.257 §1; renumbered
723.457]
     723.444 [1987 c.491 §8; repealed by 1997 c.832 §10]
     723.446 [1975 c.652 §51; renumbered 723.460]
     723.447
Certified share drafts. A
credit union may certify a share draft issued by the credit union. A credit
union that certifies a share draft may immediately charge the amount of the
share draft to the drawer’s share draft account. [1985 c.206 §5; 1987 c.286 §7;
1999 c.185 §41]
     723.450
Payment on shares and deposits; restriction on class of shares. Shares, share certificates, deposits and
deposit certificates may be withdrawn for payment to the account holder or to
third parties in accordance with the manner and procedures established by the
board of directors. The board of directors may restrict one class of shares so
that a share in the class may not be redeemed, withdrawn or transferred except
upon termination of membership in the credit union. [1985 c.801 §7]
     723.452 [1981 c.298 §1; renumbered 723.463]
     723.454
Liens. The credit union
shall have a lien on all funds of a member or joint owner on deposit with the
credit union in any individual or joint account held in any capacity, for any
obligation of the member or joint owner to the credit union. [Formerly 723.436;
1991 c.635 §12; 1999 c.185 §57]
     723.457 [Formerly 723.442; 1991 c.635 §13; repealed
by 2001 c.308 §5]
     723.460
Reduction in shares. (1)
Whenever the losses of any credit union, resulting from a depreciation in value
of its loans or investments or otherwise, exceed its undivided earnings and
reserve fund so that the estimated value of its assets is less than the total
amount due the shareholders, the credit union may by a majority vote of the
entire membership order a reduction in the shares of each of its shareholders
to divide the loss proportionately among the members.
     (2) If the credit union thereafter
realizes from such assets a greater amount than was fixed by the order of
reduction, such excess shall be divided proportionately among the shareholders
whose assets were reduced, but only to the extent of such reduction. [Formerly
723.446]
     723.462 [1999 c.185 §19; repealed by 2005 c.95 §12]
     723.463 [Formerly 723.452; 1987 c.658 §4; repealed
by 1997 c.832 §10]
     723.464
Deposits made in name of minor.
Any deposit to a credit union made to an account in the name of a minor shall
be held for the exclusive right and benefit of the minor and free from the
control or lien of all other persons, except other parties to the account and
creditors, and shall be paid, in accordance with the terms of the account, together
with any interest thereon, to or upon the order of the minor. [1999 c.185 §20]
     723.466
Disposition of deposit on death of depositor. (1) On the death of a member of a credit union, if the deposit to the
credit of the deceased member is $25,000 or less, the credit union may, upon
receipt of an affidavit from the person claiming the deposit as provided in
subsection (2) of this section, pay the moneys on deposit:
     (a) To the surviving spouse on demand of
the surviving spouse at any time after the death of the member;
     (b) If there is no surviving spouse, to
the Department of Human Services, on demand of the department no less than 46
days and no more than 75 days from the death of the member when there is a
preferred claim arising under ORS 411.708, 411.795 or 414.105;
     (c) If there is no surviving spouse and no
department claim, to the memberÂ’s surviving children 18 years of age or older;
     (d) If there is no surviving spouse,
department claim or surviving child 18 years of age or older, to the memberÂ’s
surviving parents; or
     (e) If there is no surviving spouse,
department claim, surviving child 18 years of age or older or surviving parent,
to the memberÂ’s surviving brothers and sisters 18 years of age or older.
     (2) The affidavit shall:
     (a) State where and when the member died;
     (b) State that the total deposits of the
deceased member in all financial institutions in this state do not exceed
$25,000;
     (c) Show the relationship of the affiant
to the deceased member; and
     (d) Embody a promise to pay the expenses
of last sickness, funeral expenses and just debts of the deceased member out of
the deposit, to the full extent of the deposit if necessary, in the order of
priority prescribed by ORS 115.125, and to distribute any remaining moneys to
the persons who are entitled to those moneys by law.
     (3) In the event the member died intestate
without known heirs, an estate administrator of the Department of State Lands
appointed under ORS 113.235 shall be the affiant and shall receive the moneys
as escheat property.
     (4) The credit union shall determine the
relationship of the affiant to the deceased member. However, payment of the
moneys in good faith to the affiant discharges and releases the transferor from
any liability or responsibility for the transfer in the same manner and with
the same effect as if the property had been transferred, delivered or paid to a
personal representative of the estate of the deceased member.
     (5) A probate proceeding is not necessary
to establish the right of the surviving spouse, department, surviving children,
surviving parents, surviving brothers and sisters or an estate administrator of
the Department of State Lands to withdraw the deposits upon the filing of the
affidavit. If a personal representative is appointed in an estate where a
withdrawal of deposits was made under this section, the person withdrawing the
deposits shall account for them to the personal representative.
     (6) When a credit union transfers moneys
under subsection (1) of this section, the transferor may require the transferee
to furnish the transferor with a written indemnity agreement, indemnifying the
transferor against loss for moneys paid to the extent of the amount of the
deposit.
     (7) This section is subject to the rights
of other parties to the account under ORS 723.474 to 723.498. [1999 c.185 §21;
2003 c.395 §24; 2005 c.381 §28; 2007 c.369 §3]
     723.468
Adverse claim to deposit; notice; restraining order or other process; indemnity
bond or letter of credit.
(1) A credit union shall be obligated to recognize an adverse claim to a
deposit it holds only if the adverse claimant gives notice to the credit union
of its claim and:
     (a) Procures a restraining order,
injunction or other appropriate process against the credit union in an action
wherein the person to whose credit the deposit stands is made a party and
served with summons; or
     (b) Delivers to the credit union in a
form, and with sureties acceptable to the credit union, a bond or an
irrevocable letter of credit issued by a financial institution, as defined in
ORS 706.008, indemnifying the credit union from any liability, damage or
expenses on account of the payment of the adverse claim or the dishonor of the
check or other order of the person to whose credit the deposit stands.
     (2) This section does not apply when the
person in whose name the account is carried is a fiduciary for the adverse
claimant, and the affidavit of the adverse claimant states the facts
constituting the fiduciary relationship and the facts showing reasonable cause
of belief on the part of the claimant that the fiduciary is about to
misappropriate the deposit.
     (3) A credit union may, at its option,
interplead a deposit that is subject to any adverse claim. [1999 c.185 §22]
     723.470
Checks drawn by agents presumed to be in authorized manner. If a person who owns a share or deposit
account subject to check authorizes another person as agent to draw checks
against the account, the credit union, in the absence of written notice to the
contrary, may presume that any check drawn by the agent in the manner
authorized by the terms and conditions of the account, including checks drawn
to the personal order of the agent, is drawn for a purpose authorized by the
principal and within the scope of the authority conferred upon the agent. [1999
c.185 §23]
     723.472
Checks of intoxicated or drugged persons. A credit union may refuse to pay any check, draft or order drawn upon
it when the officers or employees of the credit union have reason to believe
that the person signing or indorsing the instrument was so under the influence
of alcohol, drugs or controlled substances or that the person was otherwise so
incapacitated as to make it reasonably doubtful whether the person was capable
of transacting business at the time of signing or indorsing the check, draft or
order. [1999 c.185 §24]
     723.474
Definitions for ORS 723.474 to 723.498. As used in ORS 723.474 to 723.498, unless the context requires
otherwise:
     (1) “Account” means a contract of deposit
of funds between a member and a credit union and includes a checking account,
savings account, certificate of deposit and share account.
     (2) “Beneficiary” means a person named in
a trust account as one for whom a party to the account is named as trustee.
     (3) “Joint account” means an account
payable on request to one or more of two or more parties whether or not mention
is made of any right of survivorship.
     (4) “Multiple-party account” means a joint
account, a P.O.D. account or a trust account. “Multiple-party account” does not
include:
     (a) Accounts established for the deposit
of funds of a partnership, joint venture or other association for business
purposes; or
     (b) Accounts controlled by one or more
persons as the duly authorized agent or trustee for a corporation,
unincorporated association, charitable or civic organization, or a regular
fiduciary or trust account where the relationship is established other than by
deposit agreement.
     (5) “Net contribution” of a party to a
joint account means the sum of all deposits made to the account by or for the
party, less all withdrawals made by or for the party that have not been paid to
or applied to the use of any other party, plus a pro rata share of any interest
or dividends included in the current balance. “Net contribution” includes any
proceeds of deposit life insurance added to the account by reason of the death
of the party whose net contribution is in question.
     (6) “Party” means a person who, by the
terms of the multiple-party account, has a present right, subject to request,
to payment from a multiple-party account. A P.O.D. payee or beneficiary of a
trust account is a party only after the account becomes payable to the payee or
beneficiary by reason of the payee or beneficiary surviving the original party
or trustee. “Party” includes a guardian, conservator, personal representative
or assignee, including an attaching creditor, of a party. “Party” also includes
a person identified as a trustee of an account, whether or not a beneficiary is
named, but does not include any named beneficiary unless the named beneficiary
has a present right of withdrawal.
     (7) “Payment” of sums on deposit includes
withdrawal, payment on check or other directive of a party, any pledge of sums
on deposit by a party and any setoff, deduction or other disposition of all or
part of an account pursuant to a pledge.
     (8) “P.O.D. account” means an account
payable on request:
     (a) To one person during the lifetime of
the person and upon the death of the person to one or more P.O.D. payees; or
     (b) To one or more persons during their
lifetimes and upon the death of all of them to one or more P.O.D. payees.
     (9) “P.O.D. payee” means a person
designated on a P.O.D. account as the person to whom the account is payable on
request after the death of one or more persons.
     (10) “Request” means a proper request for
withdrawal, or a check or order for payment, that complies with all conditions
of the account, including special requirements concerning necessary signatures
and regulations of the credit union. If the credit union conditions withdrawal
or payment on advance notice, for purposes of ORS 723.474 to 723.498, the
request for withdrawal or payment is treated as immediately effective and a
notice of intent to withdraw is treated as a request for withdrawal.
     (11) “Sums on deposit” means the balance
payable on a multiple-party account including interest, dividends and any
deposit life insurance proceeds added to the account by reason of the death of
a party.
     (12) “Trust account” means an account in
the name of one or more parties as trustee for one or more beneficiaries where
the relationship is established by the form of the account and the deposit
agreement with the credit union, and there is no subject of the trust other
than the sums on deposit in the account. It is not essential that payment to
the beneficiary be mentioned in the deposit agreement. A trust account does not
include a regular trust account under a testamentary trust, a trust agreement
that has significance apart from the account, or a fiduciary account arising
from a fiduciary relationship such as attorney-client.
     (13) “Withdrawal” includes payment to a
third person pursuant to check or other directive of a party. [1999 c.185 §25]
     723.476
Application of ORS 723.478, 723.480 and 723.482; liability and setoff rights of
credit unions. The
provisions of ORS 723.478, 723.480 and 723.482 concerning beneficial ownership
between parties or between parties and P.O.D. payees or beneficiaries of
multiple-party accounts are relevant only to controversies between those
persons and their creditors and other successors, and have no bearing on the
power of withdrawal of those persons as determined by the terms of account
contracts. The provisions of ORS 723.486 to 723.496 govern the liability of
credit unions that make payments pursuant thereto, and their setoff rights. [1999
c.185 §26]
     723.478
Ownership of multiple-party accounts. (1) A joint account belongs, during the lifetime of all parties, to
the parties in proportion to the net contributions by each party to the sums on
deposit, unless there is clear and convincing evidence of a different intent.
     (2) A P.O.D. account belongs to the
original party during the lifetime of the party and not to the P.O.D. payee or
payees. If two or more persons are named as original parties, during their
lifetimes, rights between them are governed by subsection (1) of this section.
     (3) Unless a contrary intent is manifested
by the terms of the account or the deposit agreement, or there is other clear
and convincing evidence of an irrevocable trust, a trust account belongs
beneficially to the trustee during the lifetime of the trustee. If two or more
parties are named as trustees of the account, during their lifetimes,
beneficial rights between them are governed by subsection (1) of this section.
If there is an irrevocable trust, the account belongs beneficially to the
beneficiary. [1999 c.185 §27]
     723.480
Multiple-party accounts; disposition of deposit upon death of party or trustee;
effect of will. (1) Sums
remaining on deposit at a credit union at the death of a party to a joint
account are rebuttably presumed to belong to the surviving party or parties
against the estate of the decedent. If there are two or more surviving parties,
their respective ownerships during their lifetimes shall be in proportion to
their previous ownership interests under ORS 723.478, augmented by an equal
share for each survivor of any interest the decedent may have owned in the
account immediately before death. The right of survivorship continues between
the surviving parties.
     (2) If the account is a P.O.D. account:
     (a) Upon the death of one of two or more
original parties, the rights to any sums remaining on deposit are governed by
subsection (1) of this section.
     (b) Upon the death of the sole original
party or the survivor of two or more original parties, any sums remaining on
deposit belong to the P.O.D. payee or payees, if surviving, or to the survivor
of them if one or more die before the original party. If two or more P.O.D.
payees survive, there is no right of survivorship in the event of death of a
P.O.D. payee thereafter unless the terms of the account or deposit agreement
expressly provide for survivorship between them.
     (3) If the account is a trust account:
     (a) Upon the death of one of two or more
trustees, the rights to any sums remaining on deposit are governed by
subsection (1) of this section.
     (b) Upon the death of the sole trustee or
the survivor of two or more trustees, any sums remaining on deposit belong to
the person or persons named as beneficiaries, if surviving, or to the survivor
of them if one or more die before the trustee, unless there is clear and
convincing evidence of a contrary intent. If two or more beneficiaries survive,
there is no right of survivorship in the event of death of any beneficiary
thereafter unless the terms of the account or deposit agreement expressly
provide for survivorship between them.
     (4) In other cases, the death of any party
to a multiple-party account has no effect on beneficial ownership of the
account, other than to transfer the rights of the decedent as part of the
estate of the decedent.
     (5) A right of survivorship arising under
this section or from the express terms of the account, a beneficiary
designation in a trust account or a P.O.D. payee designation cannot be changed
by will.
     (6) The rebuttable presumption under
subsection (1) of this section may be overcome by evidence establishing that:
     (a) The deceased party intended a
different result; or
     (b) The deceased party lacked capacity
when the joint account was established.
     (7) A credit union is not liable for
distributing sums remaining on deposit at the death of a party to a joint
account to a surviving party or parties in accordance with the account
agreement unless, prior to distributing sums to a surviving party or parties:
     (a) The credit union has received notice
of an adverse claim under ORS 723.468; and
     (b) The adverse claimant proceeds as
required under ORS 723.468. [1999 c.185 §28; 2003 c.256 §2]
     723.482
Rights of survivorship based on form of account; alteration of form of account. The provisions of ORS 723.480 that apply to
rights of survivorship are determined by the form of the account at the time of
death of a party. Subject to satisfaction of the requirements of the credit
union, the form of an account may be altered by a written order given by a
party to the credit union. The order must be signed by the party, be received
by the credit union during the partyÂ’s lifetime, and not be countermanded by
other written order of the same party during the lifetime of the party. [1999
c.185 §29]
     723.484
Transfers of moneys upon death of depositor or trustee is not testamentary disposition. Any transfers resulting from the application
of ORS 723.480 are effective by reason of the account contracts involved and
application of ORS 723.480. The transfers are not to be considered as
testamentary or subject to administration in the estate of a deceased party. [1999
c.185 §30]
     723.486
Multiple party account; payment of deposit to one or more parties; credit union
not required to determine source or use of funds in account. Credit unions may enter into multiple-party
accounts to the same extent that they may enter into single-party accounts. Any
multiple-party account may be paid, on request, to any one or more of the
parties. For purposes of establishing net contributions a credit union shall
not be required to inquire about the source of funds received for deposit to a
multiple-party account, or to inquire about the proposed application of any sum
withdrawn from an account. [1999 c.185 §31]
     723.488
Joint account; payment to any party to account; payment to others. Any sums in a joint account may be paid, on
request, to any party without regard to whether any other party is
incapacitated or deceased at the time the payment is requested. Payment may not
be made to the personal representative or heirs of a deceased party unless:
     (1) Proof of death is presented to the
credit union, showing that the decedent was the last surviving party; or
     (2) There is no right of survivorship
under ORS 723.480. [1999 c.185 §32]
     723.490
P.O.D. account; payment to any original party; payment to others. Any P.O.D. account may be paid, on request,
to any original party to the account. Payment may be made, on request, to the
P.O.D. payee or to the personal representative or heirs of a deceased P.O.D.
payee upon presentation to the credit union of proof of death showing that the
P.O.D. payee survived all persons named as original parties. Payment may be
made to the personal representative or heirs of a deceased original party if
proof of death is presented to the credit union showing that the decedent was
the survivor of all other persons named on the account either as an original
party or as a P.O.D. payee. [1999 c.185 §33]
     723.492
Trust account; payment to trustee; payment to others. Any trust account may be paid, on request,
to any trustee. Unless the credit union has received written notice that the
beneficiary has a vested interest not dependent upon the beneficiary surviving the
trustee, payment may be made to the personal representative or heirs of a
deceased trustee if proof of death is presented to the credit union showing
that the decedent survived all other persons named on the account as either
trustee or beneficiary. Payment may be made, on request, to the beneficiary
upon presentation to the credit union of proof of death showing that the
beneficiary or beneficiaries survived all persons named as trustees. [1999
c.185 §34]
     723.494
Discharge of credit union for payments made; conditions. Payment made pursuant to ORS 723.486,
723.488, 723.490 or 723.492 discharges the credit union from all claims for
amounts paid, whether or not the payment is consistent with the beneficial
ownership of the account between parties, P.O.D. payees or beneficiaries, or
their successors. The protection given by this section does not extend to
payments made after a credit union has received written notice from any party
able to request present payment that states that withdrawals in accordance with
the terms of the account should not be permitted. Unless the notice is
withdrawn by the person giving it, the successor of any deceased party must
concur in any demand for withdrawal if the credit union is to be protected
under this section. No other notice or any other information shown to have been
available to a credit union shall affect its right to the protection provided
by this section. The protection provided by this section shall have no bearing
on the rights of parties in disputes between themselves or their successors
concerning the beneficial ownership of funds in or withdrawn from
multiple-party accounts. [1999 c.185 §35]
     723.496
Right of credit union to setoff; amount. Without qualifying any other statutory or common law right to setoff
or lien, and subject to any contractual provision, if a party to a
multiple-party account is indebted to a credit union, the credit union has a
right to setoff against the account in which the party has or had immediately
before the death of the party a present right of withdrawal. The amount of the
account subject to setoff is that proportion to which the debtor is, or was
immediately before the death of the debtor, beneficially entitled and, in the
absence of proof of net contributions, to an equal share with all parties
having present rights of withdrawal. [1999 c.185 §36]
     723.498
Designation of agent for account; powers of agent. Nothing in ORS 723.426, 723.432, 723.474,
723.476 or 723.478 shall preclude a party to an account from adding the name of
another person to the account with the designation of “agent.” The agent shall
have no present or future interest in the sums on deposit in the account, but
the credit union may honor requests for payment from the accounts by the agent,
unless the principal is deceased at the time the payment is requested and the
credit union has actual knowledge of the death. Payments from the account by
the credit union at the request of the agent shall discharge the credit union
from all claims for amounts so paid. [1999 c.185 §37]
LOANS
     723.502
Purposes; terms. A credit
union may make loans to members of the credit union for such purpose and upon
such security and terms as the credit committee, credit manager or loan officer
approves. A person who is not a member of the credit union may be a guarantor
or coobligor on a credit unionÂ’s loan to a member of the credit union. [1975
c.652 §52; 1981 c.412 §8; 2007 c.343 §7]
     723.506
Application. Every
application for a loan shall be made in the form prescribed by the credit committee,
credit manager or loan officer. The application shall state the security, if
any offered. Each loan shall be evidenced by a written document. [1975 c.652 §53;
1991 c.635 §14]
     723.510 [Amended by 1959 c.106 §20; 1971 c.681 §11;
repealed by 1975 c.652 §88]
     723.512
Loan limit; exception. (1)
No loan shall be made to any member in an aggregate amount in excess of
$15,000, or 15 percent of the credit unionÂ’s equity, whichever is greater. In
determining the amount of loans to be made to a member, loans for which that
member is a guarantor or surety shall be included, as well as loans to persons
who are not individuals if the individual member is a principal or owner of the
person who is not an individual or the loan is for that memberÂ’s benefit.
     (2) The restrictions in subsection (1) of
this section do not apply to any loan fully guaranteed by shares or deposits. [1975
c.652 §54; 1977 c.628 §3; 1979 c.88 §34; 1987 c.650 §8; 1995 c.319 §8; 1999
c.185 §42]
     723.516
Installments. A member may
receive a loan in installments, or in one sum, and may pay the whole or any
part of the memberÂ’s loan on any day on which the office of the credit union is
open for business. [1975 c.652 §55]
     723.520 [Repealed by 1959 c.106 §23]
     723.522
Line of credit. The credit
committee, credit manager, or loan officer may approve in advance upon their
own motion or upon application by a member, a line of credit, and advances may
be granted to such member within the limit of such extension of credit. Where a
line of credit has been approved, no additional loan applications are required
as long as the aggregate obligation does not exceed the limit of such extension
of credit. [1975 c.652 §56; 1987 c.286 §8]
     723.526
Other loan programs. (1)
Loans to credit union members may be shared with other credit unions,
corporations or financial organizations.
     (2) A credit union may participate in
guaranteed loan programs of the federal government, the State of
     (3) A credit union may purchase the
conditional sales contracts, notes and similar instruments of its members.
     (4) A credit union may purchase the leases
of its members if the leases satisfy the requirements of ORS 723.152 (9). [1975
c.652 §57; 1999 c.185 §43]
     723.530 [Amended by 1959 c.106 §21; 1971 c.367 §1;
repealed by 1975 c.652 §88]
     723.532
Loans to credit union officials; waiver; rules. (1) For the purposes of this section, “management
team” means any individual who holds a position of vice president or higher or
who has policymaking authority.
     (2) A credit union may make loans to its
individual directors, members of its management team, credit managers and
members of its supervisory and credit committees, provided that:
     (a) The loan complies with all lawful
requirements under this chapter with respect to loans to other borrowers and is
not on terms more favorable than those extended to other borrowers;
     (b) The combined aggregate amount of loans
to any one such individual that exceeds five percent of the credit unionÂ’s
equity or $25,000, whichever is less, has been approved by the credit unionÂ’s
board of directors; and
     (c) The combined aggregate amount of such
loans to all such individuals may not exceed 10 percent of the credit unionÂ’s
assets.
     (3) Except when approved by the board of
directors of the credit union, no director, officer or committee member shall
be permitted to become surety or guarantor for any loan or advance made by the
credit union except for the spouse or children of the director, officer or
committee member.
     (4) The Director of the Department of
Consumer and Business Services may waive the requirements of this section by
rule or order upon request of a credit union. The director may establish by
rule a higher amount than set in subsection (2)(b) of this section and the type
of loans to directors, officers or committee members that must be approved by
the board of directors of the credit union. [1975 c.652 §58; 1985 c.206 §2;
1985 c.762 §98; 1987 c.286 §9; 1997 c.832 §7; 1999 c.185 §44]
     723.536
Loans to nonmembers; personal liability. Any officer, director or member of a committee of a credit union who
knowingly permits a loan to be made or participates in a loan to a nonmember of
the credit union shall be primarily liable to the credit union for the amount
thus illegally loaned. The illegality of such loan shall be no defense in any
action by the credit union to recover the amount loaned. [1975 c.652 §59]
     723.540 [Repealed by 1975 c.652 §88]
     723.550 [Amended by 1959 c.106 §22; repealed by 1975
c.652 §88]
     723.560 [Repealed by 1975 c.652 §88]
INSURANCE AND
GROUP PURCHASING
     723.572
Insurance for members. (1) A
credit union may purchase or make available life savings, loan protection and
other forms of insurance for its members in amounts related to their respective
ages, shares, deposits or loan balances or to any combination of them.
     (2) A credit union may enter into
cooperative marketing arrangements to facilitate its membersÂ’ voluntary
purchases of insurance. [1975 c.652 §60; 1999 c.185 §45]
     723.576
Liability insurance for director, officer, employee or agent. A credit union may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the credit union, or who is or was serving at the request of the
credit union as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred by such person in any such capacity
or arising out of such personÂ’s status as such, whether or not the credit union
would have the power to indemnify such person against such liability. [1975
c.652 §61]
     723.582
Share and deposit insurance.
(1) Each credit union shall secure insurance on shares and deposits from the
National Credit Union Administration under the Federal Credit Union Act or its
successor, or from any other insuring organization that provides comparable
coverages and is approved by the Director of the Department of Consumer and
Business Services. Any one share of a member, as designated in the bylaws of
the credit union, may be excluded from the requirement for insurance.
     (2) The director may make available
condition and examination reports to the appropriate insuring organization and
may accept any report of examination made by such organization. The director
may appoint the appropriate insuring organization as liquidating agent of an
insured credit union. [1975 c.652 §62; 1977 c.549 §1; 1985 c.801 §9; 1987 c.286
§10; 1999 c.185 §46]
     723.586
Group purchasing. A credit
union may enter into cooperative marketing arrangements to facilitate its
membersÂ’ voluntary purchases of such goods and services as are in the interest
of improving economic and social conditions of the members. Said investment
shall not exceed one percent of the credit unionÂ’s assets. Notwithstanding any
other provision of law, the taxable income from such activities which are
conducted by the credit union shall be subject to tax pursuant to ORS 317.920. [1975
c.652 §63; 1983 c.162 §56; 1999 c.185 §47]
INVESTMENTS
     723.602
Investment of funds; rules.
Funds not used in loans to members may be invested:
     (1) In securities, obligations or other
instruments of or issued by or fully guaranteed as to principal and interest by
the
     (2) In obligations of any state of the
United States, the agencies or instrumentalities of the federal government, the
District of Columbia, the Commonwealth of Puerto Rico and the several
territories organized by Congress, or any political subdivision thereof.
     (3) In certificates of deposit or passbook
type accounts issued by a state or national bank, mutual savings bank or
savings and loan association.
     (4) In loans to or in shares or deposits
of other credit unions.
     (5) In stocks, membership units or other
ownership interests in a corporation, limited liability company or mutual
association in an amount not to exceed one percent of assets if:
     (a) The ownership or membership, as
applicable, is primarily confined to credit unions or organizations of credit
unions; and
     (b) The purposes for which the agency or
association is organized are designed primarily to service or otherwise assist
credit union operations.
     (6) In addition to the limit specified in
subsection (5) of this section, in loans to a corporation, limited liability
company or mutual association, in an amount not to exceed one percent of
assets, if:
     (a) The ownership or membership, as
applicable, is primarily confined to credit unions or organizations of credit
unions; and
     (b) The purposes for which the agency or
association is organized are designed primarily to service or otherwise assist
credit union operations.
     (7) In shares of a credit union cooperative
society organized under the laws of this state or of the laws of the
     (8) In loans to any credit union
association or corporation, national or state, of which the credit union is a
member, except that such investments shall be limited to two percent of the
assets of the credit union.
     (9) In such other investments as approved
by the Director of the Department of Consumer and Business Services by rule or
order. [1975 c.652 §64; 1987 c.286 §11; 1999 c.185 §48; 2005 c.95 §9]
RESERVE
ALLOCATIONS
     723.631
Regular reserve; reserve for loan losses; rules. (1) A credit union shall establish and
maintain a regular reserve for contingencies. The Director of the Department of
Consumer and Business Services may adopt rules prescribing:
     (a) Minimum net worth requirements for
credit unions; and
     (b) Actions to be taken by a credit union
when the net worth of the credit union falls below the applicable minimum net
worth requirement.
     (2) In addition to the regular reserve
required in subsection (1) of this section, a credit union shall establish a
reserve for loan losses. The credit union shall allocate sufficient funds each
month to the reserve for loan losses to maintain the reserve for loan losses in
an amount at least equal to the credit unionÂ’s best estimate of the losses the
credit union expects to sustain in the liquidation of currently outstanding
loans. [1981 c.192 §38 (enacted in lieu of 723.632); 1995 c.319 §3; 2005 c.95 §10]
     723.632 [1975 c.652 §65; 1979 c.88 §35; repealed by
1981 c.192 §37 (723.631 enacted in lieu of 723.632)]
     723.636
Charges to regular reserve.
(1) Subject to subsection (2) of this section, the board of directors of a
credit union may authorize losses to be charged to the regular reserve after
first depleting the balance of the undivided earnings account and other
appropriations of undivided earnings designated by the management of the credit
union or by the regulatory authorities.
     (2) An authorization may be made under
subsection (1) of this section only if the charge will not cause the net worth
of the credit union to fall below any minimum net worth requirement prescribed
by the Director of the Department of Consumer and Business Services under ORS
723.631. The authorization must state the amount charged to the regular reserve
and include an explanation of the need for the charge.
     (3) Upon application of a credit union,
the director may approve a charge to the regular reserve that will cause the
net worth of the credit union to fall below any minimum net worth requirement
prescribed by the director under ORS 723.631. [1975 c.652 §66; 1981 c.192 §39;
1999 c.185 §49; 2005 c.95 §11]
     723.642 [1975 c.652 §67; 1977 c.628 §4; repealed by
1981 c.192 §46]
     723.646
Special reserves; purpose.
(1) In addition to the regular reserve established under ORS 723.631, special
reserves to protect the interest of members shall be established, as provided
in this section:
     (a) When required by rule; or
     (b) When found by the board of directors
of the credit union or by the Director of the Department of Consumer and
Business Services, or if the membersÂ’ accounts are insured by the National
Credit Union Administration, the Administrator of the National Credit Union
Administration, in any special case, to be necessary for that purpose.
     (2) Special reserves belong to the credit
union and shall be used to provide liquidity for the credit union. A credit
union may not pay regular or special dividends from the special reserve. [1975
c.652 §68; 1981 c.192 §40; 1995 c.319 §4]
CHANGE IN
CORPORATE STATUS
     723.672
Suspension; revocation of charter. (1) If it appears that any credit union is bankrupt or insolvent, or
that it has willfully violated any provision of this chapter, or is operating
in an unsafe or unsound manner, the Director of the Department of Consumer and
Business Services shall issue an order temporarily suspending the credit unionÂ’s
operations for not less than 30 nor more than 60 days. The board of directors
shall be given notice by registered mail or by certified mail with return
receipt of such suspension, and a list of the specific violations of this
chapter.
     (2) Upon receipt of the suspension notice,
the credit union shall cease all operations, except those authorized by the
director. The board of directors shall then file with the director a reply to
the suspension notice, and may request a hearing to present a plan of
corrective actions proposed if it desires to continue operations. The board may
request that the credit union be declared insolvent and a liquidating agent be
appointed.
     (3) Upon receipt from the suspended credit
union of evidence that the conditions causing the order of suspension have been
corrected, the director may revoke the suspension notice and permit the credit
union to resume normal operations.
     (4) If the director, after issuing notice
of suspension and providing an opportunity for a hearing, rejects the credit
unionÂ’s plan to continue operations, the director may then revoke the credit
unionÂ’s charter, appoint a liquidating agent and liquidate the credit union.
The credit union may request the appropriate court to stay execution of such
action. Involuntary liquidation may not be ordered prior to the conclusion of
suspension procedures outlined in this section.
     (5) If, within the suspension period, the
credit union fails to answer the suspension notice or request a hearing, the
director may then revoke the credit unionÂ’s charter, appoint a liquidating
agent and liquidate the credit union. [1975 c.652 §69; 1985 c.762 §99; 1991
c.249 §68]
     723.676
Liquidation. (1) A credit
union may elect to dissolve voluntarily and liquidate its affairs in the manner
prescribed in this section.
     (2) The board of directors shall adopt a
resolution recommending the credit union be dissolved voluntarily and directing
that the question of liquidation be submitted to the members.
     (3) Within 10 days after the board of
directors decides to submit the question of liquidation to the members, the
president or chairperson of the board shall notify the Director of the
Department of Consumer and Business Services thereof in writing setting forth
the reasons for the proposed action. Within 10 days after the members act on
the question of liquidation, the president or chairperson of the board shall
notify the director in writing as to whether or not the members approved the
proposed liquidation.
     (4) As soon as the board of directors
decides to submit the question of liquidation to the members, payment on
shares, withdrawal of shares, making any transfer of shares to loans and
interest, making investments of any kind and granting loans shall be suspended
pending action by members on the proposal to liquidate. On approval by the
members of such proposal, all such business transactions shall be permanently
discontinued. Necessary expenses of operation shall, however, continue to be
paid on authorization of the board of directors or liquidating agent during the
period of liquidation.
     (5) For a credit union to enter voluntary
liquidation, approval by a majority of the members in writing or by a
two-thirds majority of the members present at a regular or special meeting of
the members is required. Where authorization for liquidation is to be obtained
at a meeting of the members, notice in writing shall be given to each member by
first class mail to the memberÂ’s last-known address at least 10 days prior to
such meeting.
     (6) A liquidating credit union shall
continue in existence for the purpose of discharging its debts, collecting and
distributing its assets and doing all acts required in order to wind up its
business and may sue and be sued for the purpose of enforcing such debts and
obligations until its affairs are fully adjusted.
     (7) The board of directors or the
liquidating agent shall use the assets of the credit union to pay: First,
expenses incidental to liquidating including any surety bond that may be
required; and, second, any liability due nonmembers. Assets then remaining
shall be distributed to the members proportionately to the shares and deposits
held by each member as of the date dissolution was voted.
     (8) As soon as the board of directors or
the liquidating agent determines that all assets from which there is a
reasonable expectancy of realization have been liquidated and distributed as
set forth in this section, they shall execute a certificate of dissolution on a
form prescribed by the director and file the same, together with all pertinent
books and records of the liquidating credit union, with the director, whereupon
such credit union shall be dissolved. [1975 c.652 §70; 1999 c.185 §50]
     723.682
Merger. (1) Any credit union
chartered in this state may, with the approval of the Director of the
Department of Consumer and Business Services, merge with another credit union
under the existing charter of the other credit union pursuant to any plan
agreed upon by the majority of each board of directors of each credit union
joining in the merger and approved by the affirmative vote of a majority of the
members of the merging credit union voting at a meeting of its members duly
called for such purpose.
     (2) After agreement by the directors and
approval by the members of the merging credit union, the president and
secretary of the credit union shall execute a certificate of merger, which
shall set forth all of the following:
     (a) The time and place of the meeting of
the board of directors at which the plan was agreed upon.
     (b) The vote in favor of the adoption of
the plan.
     (c) A copy of the resolution or other
action by which the plan was agreed upon.
     (d) The time and place of the meeting of
the members at which the plan agreed upon was approved.
     (e) The vote by which the plan was
approved by the members.
     (3) The certificate and a copy of the plan
of merger agreed upon shall be forwarded to the director, certified by the
director and returned to the continuing credit union within 30 days.
     (4) Upon return of the certificate from
the director, all property, property rights and membersÂ’ interest of the merged
credit union shall vest in the continuing credit union without deed,
indorsement or other instrument of transfer, and all debts, obligations and
liabilities of the merged credit union shall be deemed to have been assumed by
the continuing credit union under whose charter the merger was affected. The
rights and privileges of the members of the merged credit union shall remain
intact.
     (5) This section shall be construed,
whenever possible, to permit a credit union chartered under the laws of any
other state or of the United States to merge with one chartered under the laws
of this state, or to permit one chartered under the laws of this state to merge
with one chartered under the laws of any other state or of the United States. [1975
c.652 §71; 1999 c.185 §51]
     723.686
Conversion of charter. (1) A
credit union chartered under the laws of this state may be converted to a
credit union chartered under the laws of the
