286.6-296 Suspension and removal of officers -- Review of such actions -Injunction.
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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.
The supervisory committee by a unanimous vote may suspend any officer or
member of the board of directors until the next members' meeting, which shall be
held not less than seven (7) nor more than twenty-one (21) days after such
suspension. At such meeting the suspension shall be acted upon by the members.
Any member of the supervisory committee may be removed by the board of
directors for failure to perform his duties in accordance with this subtitle, the
articles of incorporation, or the bylaws.
If the commissioner shall determine that any officer or director of a credit union has
committed any violation of law, administrative regulation, or of a cease and desist
order which has become final, or has engaged in or participated in any unsafe or
unsound practice in connection with the credit union, or has committed or engaged
in any act, omission, or practice which constitutes a breach of his fiduciary duty as
such officer or director, and the commissioner determines that the credit union has
suffered or will probably suffer substantial financial loss or other damages or that
the interests of its members could be seriously prejudiced by reason of such
violation or practice or breach of fiduciary duty, or that the director or officer has
received financial gain by reason of the violation or practice or breach of fiduciary
duty, the commissioner may serve upon such director or officer a written notice of
intention to remove him or her from office. The violation, practice, or breach must
be one involving personal dishonesty on the part of such director or officer, or one
which demonstrates a willful or continuing disregard for the safety or soundness of
the credit union. The written notice shall serve to suspend the officer or director
from office. Such suspension shall become effective upon service of such notice
and, unless stayed by a court in proceedings authorized by subsection (6) of this
section, shall remain in effect pending the completion of the administrative
proceedings under subsection (5) of this section and until such time as the
commissioner shall dismiss the charges specified in such notice or, if an order of
removal is issued against the officer or director, the effective date of any such order.
A notice of intention to remove an officer or director from office shall contain a
statement of the facts constituting grounds therefor, and shall fix a time and place at
which a hearing will be held thereon. Such hearing shall be fixed for a date not
earlier than thirty (30) days nor later than sixty (60) days after the date of service of
such notice, unless an earlier date is set by the commissioner at the request of such
officer or director and for good cause shown. Unless such officer or director shall
appear at the hearing in person or by duly authorized representative, he or she shall
be deemed to have consented to the issuance of an order of removal. In the event of
such consent, or if upon the record made at any such hearing the commissioner shall
find that any of the grounds specified in such notice have been established, the
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commissioner may issue such orders of suspension or removal from office as he or
she deems appropriate.
Within ten (10) days after an officer or director has been suspended from office,
such officer or director may apply to the Circuit Court of the residence of the
individual or of the principal office of the credit union for a stay of such suspension
pending the completion of the administrative proceedings pursuant to the notice
served upon such officer or director, and such court shall have jurisdiction to grant
such stay.
Any person aggrieved by a final order of the commissioner under subsection (5) of
this section may obtain a review of the order by filing in the Circuit Court of the
residence of the individual or of the principal office of the credit union a petition of
appeal within ten (10) days after the rendition of a final order. A copy of the petition
shall be served upon the commissioner and thereupon the commissioner or the
commissioner's agent shall certify and file in court a copy of the record or other
evidence upon which the order is entered. No objection to the order may be
considered by the court unless it was argued before the commissioner or there were
reasonable grounds for failure to do so.
The commissioner may apply to the Circuit Court of the residence of the individual
or of the principal office of the credit union for an injunction to enforce any order
under subsection (5) of this section and it shall be the duty of the court to issue such
injunction.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 731, effective July 15, 2010. -- Amended
1988 Ky. Acts ch. 195, sec. 3, effective July 15, 1988. -- Created 1984 Ky. Acts
ch. 408, sec. 30, effective July 13, 1984.
Formerly codified as KRS 290.296.
Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts
ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the
Kentucky Financial Services Code, KRS Chapter 286, and KRS references within
this statute have been adjusted to conform with the 2006 renumbering of that code.
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