2014 Connecticut General Statutes
Title 36a - The Banking Law of Connecticut
Chapter 667 - Credit Unions
Section 36a-448a - Governing board powers.

(a) The governing board of a Connecticut credit union shall be charged with and have control over the general management of the operations, funds, committee actions and records of the credit union. Except to the extent the governing board is otherwise authorized to delegate such authority or unless such action would be detrimental to the financial integrity of the Connecticut credit union, the governing board shall: (1) Establish and adopt written policies necessary to implement the powers of the credit union, which policies shall be approved and reviewed on at least an annual basis, including policies governing: (A) Lending in accordance with sections 36a-457a, 36a-457b and 36a-458a, (B) investments in accordance with subsection (a) of section 36a-459a, (C) employment and personnel, (D) funds management, (E) collections, (F) charge-offs, (G) conditions of membership, and expulsion of members in accordance with subsection (b) of section 36a-439a, (H) charitable contributions, and (I) conflicts of interest in accordance with sections 36a-454b and 36a-458a; (2) make adequate provision for an allowance for investment losses account in accordance with generally accepted accounting principles and for an allowance for a loan and lease losses account in accordance with generally accepted accounting principles and section 36a-441a; (3) declare dividends in accordance with sections 36a-441a and 36a-456c; (4) authorize interest refunds to members; (5) determine the maximum amount of shares that a member may own; (6) establish different classes of share accounts, including special purpose accounts, classified according to different rights and restrictions; (7) appoint and authorize members of senior management to conduct and supervise the business of the Connecticut credit union and to approve all usual expenditures incident to the conduct of the business of the Connecticut credit union; (8) cause to be obtained and maintained in full force and effect at all times the bond required by subsection (e) of section 36a-437a, and subsection (b) of section 36a-442a; (9) approve loans in accordance with the bylaws of the Connecticut credit union and cause to be prepared each month and maintained on file in the main office of the Connecticut credit union a list of all delinquent loans; (10) authorize any extraordinary expenditures necessary or appropriate for the conduct of the business of the Connecticut credit union; (11) establish a supervisory committee and appoint its members and may establish and appoint members to other committees consistent with its bylaws to carry out the business of the credit union, which committees shall keep complete minutes of all actions taken; (12) fill any vacancies that may arise among the directors, senior management or members of board-appointed committees, in accordance with this section and in the manner provided in the bylaws; and (13) exercise such other authority and perform such other duties as prescribed by sections 36a-435a to 36a-472a, inclusive, and the bylaws.

(b) The governing board of a Connecticut credit union shall consist of an odd number of directors, at least five in number. The initial governing board shall be elected at the organization meeting of the Connecticut credit union as provided in subsection (e) of section 36a-437a, and thereafter by the members of the Connecticut credit union at the annual meeting as provided in section 36a-440a. Any director elected or appointed to serve on the governing board of a troubled Connecticut credit union shall be approved by the commissioner prior to any such service. For the purposes of this subsection, “troubled Connecticut credit union” means any Connecticut credit union that, in the written opinion of the commissioner is (1) in danger of becoming insolvent, (2) not likely to be able to meet the demands of its members, or pay its obligations in the normal course of business or is likely to incur losses that may deplete all or substantially all of its capital, or (3) being operated in an unsafe and unsound manner.

(c) Each director shall hold office for the term provided in the bylaws, except that the term may not exceed three years as long as the director is qualified to serve under subsection (e) of this section and until the director’s successor has qualified. A director may serve more than one term. If directors are elected for terms in excess of one year, their terms of office shall be staggered so that, insofar as possible, an equal number of such terms shall expire each year.

(d) Each director, upon such director’s election, shall take and subscribe to an oath or affirmation that the director (1) will diligently and honestly perform the duties of director in administering the affairs of the Connecticut credit union; (2) will remain responsible for the performance of the duties of director even if the director delegates the performance of such duties; and (3) will not knowingly or wilfully permit the violation of any law or regulation applicable to credit unions. Each such oath or affirmation shall be recorded in the minutes of the governing board, and the Connecticut credit union shall promptly file a copy of such minutes with the commissioner.

(e) No person shall be qualified to serve as a director of a Connecticut credit union if such person (1) is not a member in good standing; (2) has been found liable on any claim or convicted of any offense involving dishonesty or breach of trust; (3) has been removed by any state or federal regulatory agency from office as a director, officer or employee of a financial institution; (4) is not eligible for coverage under the surety bond required by subsection (a) of this section and section 36a-442a; or (5) has habitually neglected to pay debts or has become insolvent or bankrupt, unless the governing board of such credit union determines in writing that it would be in the best interests of the credit union for such person to be so qualified to serve as director.

(f) No director of a Connecticut credit union may receive compensation for services as a member of the governing board and no member of a board-appointed committee of such Connecticut credit union shall receive compensation for services as a member of such committee, except a member of the supervisory committee may be compensated for the time actually spent performing audits and verifications.

(g) In accordance with the bylaws of a Connecticut credit union, the officers of such credit union shall be members of the governing board who are elected by members of the governing board. The chairperson and vice chairperson shall not hold more than one office at a time. The duties of the officers shall be set forth in the bylaws.

(h) (1) The governing board of a Connecticut credit union may fix the compensation of the employees of such credit union.

(2) The directors, board-appointed committee members and members of senior management of a Connecticut credit union may be reimbursed for reasonable and necessary out-of-pocket expenses actually incurred and paid in the performance of their official duties.

(i) (1) The governing board of a Connecticut credit union shall remove, by a two-thirds vote of its members at a regular or special meeting, a director or a board-appointed committee member who fails, without good cause, to attend three consecutive meetings of the governing board or committee or one-half of such meetings held during a calendar year, who is no longer qualified under subsection (e) of this section, or for any of the causes enumerated and in accordance with subdivision (2) of this subsection.

(2) The governing board of a Connecticut credit union shall have the power to suspend at any time, by a two-thirds vote of its members, at a regular or special meeting, any director or member of a board-appointed committee for good cause, including, but not limited to, (A) a violation of any statute, regulation or order applicable to such credit union; (B) participation in any unsafe or unsound practice in connection with such credit union; (C) commission of or participation in a crime which is punishable by imprisonment for a term exceeding one year under state or federal law, as charged in any information, indictment or complaint, and if continued service or participation by such director or member may pose a threat to the interests of members of such credit union; (D) failure to perform such director’s or member’s duties or breach of such director’s or member’s fiduciary duty; (E) use of such director’s or member’s official position in a manner contrary to the interests of such credit union or its members; and (F) breach of a written agreement with the commissioner. The suspension shall take effect immediately and the commissioner shall be notified promptly of such suspension. Within seven business days after the effective date of the suspension, the governing board shall cause notice to be given to all members of the Connecticut credit union of a special meeting of members to be held for the purpose of hearing the report of the governing board regarding the suspension and voting on removal, provided such notice shall not be given if the director or member of a board-appointed committee who is subject to suspension resigns. The special meeting shall be held no more than twenty-one business days after the effective date of the suspension. The membership of the Connecticut credit union shall have, by majority vote, the authority to accept or reject the report of the governing board. The governing board shall take any action with respect thereto as the members deem necessary. If such action involves removal, the credit union shall promptly notify the commissioner of such removal.

(j) (1) A vacancy on the governing board that exists due to the death, resignation or removal of a director shall be filled by majority vote of the remaining directors, regardless of whether the remaining directors constitute a quorum. A director elected by the governing board to fill a vacancy shall hold office until the next annual meeting, at which time the members of the credit union shall vote to fill the remainder of the unexpired term.

(2) A vacancy on the governing board that exists due to the expiration of the term of a director shall be filled by the appointment of a successor director by the secretary unless there are a greater number of candidates than vacancies to be filled, in which case the vacancies shall be filled by a vote of the members of the Connecticut credit union.

(k) (1) If the bylaws so provide, the governing board may appoint advisory directors and directors emeritus to serve as appointed directors without compensation. Appointed directors shall serve at the pleasure of the governing board to advise and consult with the board in carrying out the board’s duties and responsibilities.

(2) An advisory director need not be eligible for membership in the credit union, shall not be a member of the governing board, and shall not be entitled to vote on any matter before the board. An advisory director may participate in any governing board or committee deliberation, but shall not make any motions.

(3) A director emeritus shall be a member of the credit union and shall not be an officer of the credit union, participate in any governing board or committee deliberations, make motions or vote on any matter before the governing board.

(4) The number of appointed directors and their qualifications shall be specified in the bylaws.

(P.A. 02-73, S. 45; P.A. 03-35, S. 4; 03-84, S. 52; 03-259, S. 23; P.A. 04-8, S. 6.)

History: P.A. 03-35 amended Subsec. (k) by dividing existing Subdiv. (1) into Subdivs. (1) and (2), redesignating existing Subdivs. (2) and (3) as Subdivs. (3) and (4), amending Subdiv. (1) to authorize board to appoint directors emeritus, to provide for advisory directors and directors emeritus to serve as appointed directors without compensation and to make technical changes, amending Subdiv. (3) to delete provision re appointment of directors emeritus, and amending Subdiv. (4) to substitute “appointed directors” for “advisory directors and directors emeritus”; P.A. 03-84 changed “Commissioner of Banking” to “commissioner” in Subsecs. (b) and (i)(2), effective June 3, 2003; P.A. 03-259 amended Subsec. (d) by requiring each director to take and subscribe to oath or affirmation “upon such director’s election” and requiring each oath or affirmation to be recorded in minutes of governing board and a copy of such minutes to be promptly filed with commissioner; P.A. 04-8 made a technical change in Subsec. (k)(4), effective April 16, 2004.