2005 Vermont Code - § 2066. — Administration

§ 2066. Administration

(a) Credit unions organized under this chapter shall be under the supervision of the commissioner of banking, insurance, securities, and health care administration who may issue rules not inconsistent with this chapter as may be necessary for the proper conduct of credit unions organized under it. General rules affecting all credit unions shall not be effective until sufficient time has been allowed for comment by the credit unions and the Vermont Credit Union League, Inc. Upon written request showing reasonable cause, the commissioner shall call a hearing on the proposed general rules.

(b) The commissioner may, if he or she determines that it is in the public interest and that there is no materially adverse financial effect on the shareholders, borrowers or the general public, by rule authorize a credit union to engage in any procedural activity in which a federal credit union may lawfully engage.

(c) The commissioner may, if he or she determines that it is in the public interest, by rule authorize a credit union to provide an insurance company with the membership list of the credit union.

(d) The commissioner may restrict the withdrawal of deposits from a credit union when he or she finds that extraordinary circumstances make the restriction necessary for the proper protection of members of the affected credit union.

(e) The commissioner may order any person to cease violating this title or a lawful regulation issued under it, or to cease engaging in any unsafe or unsound practice in connection with the operation of a credit union.

(f)(1) The commissioner may impose a penalty of not more than $15,000.00 for each violation upon any credit union which, or any director, trustee, officer, committee member or employee of a credit union who

(A) knowingly violates this title or a lawful regulation or order issued under it; or

(B) has knowingly engaged or participated in any materially unsafe or unsound practice in connection with the credit union; or

(C) has knowingly committed or engaged in any act, omission, or practice which constitutes a breach of fiduciary duty to the credit union.

(2) In determining the amount of a penalty assessed pursuant to this subsection, the commissioner shall consider the following factors:

(A) the appropriateness of the penalty with respect to the financial resources and good faith of the individual or credit union charged;

(B) the gravity of the violation or practice;

(C) the history of previous violations or practices of a similar nature;

(D) the economic benefit derived by the individual from the violation or practice; and

(E) other factors as justice may require.

(3) A credit union shall not indemnify a director or an officer for a penalty imposed under this subsection.

(g)(1) The commissioner may remove a director, trustee, officer, committee member or employee of a credit union who

(A) knowingly violates this title or a lawful regulation or order issued under it; or

(B) is convicted of a crime involving dishonesty; or

(C) has knowingly engaged or participated in any materially unsafe or unsound practice in connection with the credit union; or

(D) has knowingly committed or engaged in any act, omission, or practice which constitutes a breach of fiduciary duty to the credit union.

(2) Provided, further, with respect to acts or omissions under subdivisions (1)(C) and (D) of this subsection that the commissioner finds

(A) the credit union has suffered or probably will suffer substantial financial loss or other damage;

(B) the interest of its members could be seriously prejudiced by such violation, practice or breach of fiduciary duty; or

(C) the director, trustee, officer, committee member or employee has received material financial gain by reason of such violation, practice or breach.

(h) Notice of the proposed penalty or removal order pursuant to subsections (f) and (g) of this section and the grounds thereof shall be served on the credit union and the affected director, trustee, officer, committee member or employee. The credit union or any person so served may request a hearing to be held by the commissioner within 30 days of service on the credit union. The hearing shall be private unless the commissioner determines that a public hearing is necessary to protect the public interest. If no hearing is requested, the penalty or removal order shall become final 30 days after service on the credit union. If it is deemed necessary to assure the continued safety and soundness of the credit union, the commissioner may order an immediate suspension of the director, trustee, officer, committee member or employee pending completion of further administrative proceedings on a removal order pursuant to subsection (g) of this section.

(i) It shall be a criminal offense punishable by a fine of $1,000.00 or a year in prison, or both, for any person, after receipt of a removal order, or an order assessing a penalty, to exercise any power of any credit union until the penalty has been satisfied or otherwise satisfactorily resolved between the parties, or the removal or penalty order is vacated by the commissioner or by a court of competent jurisdiction. (Added 1967, No. 312 (Adj. Sess.), § 1, eff. March 22, 1968; amended 1969, No. 18, § 4, eff. March 11, 1969; 1975, No. 239 (Adj. Sess.); 1985, No. 167 (Adj. Sess.), § 3, eff. May 5, 1986; 1989, No. 225 (Adj. Sess.), § 25(b); 1991, No. 28, § 6; 1995, No. 180 (Adj. Sess.), § 38(a).)