The Florida Senate

657.001  Short title.

657.002  Definitions.

657.003  Purposes.

657.005  Notice of intent to organize; investigation by department; application for authority to organize a credit union.

657.0061  Amendments to bylaws.

657.008  Place of doing business.

657.021  Board of directors; executive committee.

657.022  Executive officers.

657.023  Membership.

657.024  Membership meetings.

657.026  Supervisory or audit committee.

657.0265  Liability of credit union directors, supervisory committee members, or audit committee members.

657.027  Credit committee and credit manager.

657.028  Activities of directors, officers, committee members, employees, and agents.

657.031  Powers.

657.0315  Contracts for providing goods, products, or services.

657.033  Accounts.

657.0335  Additional power to restrict withdrawals.

657.038  Loan powers.

657.039  Loan powers; extension of credit to directors, officers, committee members, and certain employees.

657.041  Insurance.

657.042  Investment powers and limitations.

657.043  Reserves.

657.051  Fiscal year.

657.053  Assessments; state credit unions.

657.055  Retention and destruction of certain records.

657.062  Assumption of control by guarantor or insurer.

657.063  Involuntary liquidation.

657.064  Voluntary liquidation.

657.065  Merger.

657.066  Conversion from state credit union to federal credit union and conversely.

657.067  Conversion from federal to state charter; requirements for application approval.

657.068  Central credit unions.

657.001  Short title.--This part may be cited as the "Florida Credit Union Act."

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 91-307; s. 1, ch. 92-303.

657.002  Definitions.--As used in this part:

(1)  "Capital" means shares, deposits, and equity.

(2)  "Central credit union" means a credit union the membership of which includes, but is not limited to, other credit unions, members of credit unions, credit union employees, employees of organizations serving credit unions, and the families of such members.

(3)  "Corporate credit union" means any central credit union organized pursuant to any state or federal act for the purpose of serving other credit unions.

(4)  "The corporation" means the Florida Credit Union Guaranty Corporation, Inc.

(5)  "Correspondent" means that person designated on an application to organize a credit union as the person to whom all correspondence regarding the application should be sent.

(6)  "Credit union" means any cooperative society organized pursuant to this part.

(7)  "Department" means the Department of Banking and Finance.

(8)  "Deposits" means that portion of the capital paid into the credit union by members on which a contractual rate of interest will be paid.

(9)  "Equity" means undivided earnings, reserves, and allowance for loan losses.

(10)  "Foreign credit union" means a credit union organized and operating under the laws of another state.

(11)  "Immediate family" means parents, children, spouse, or surviving spouse of the member, or any other relative by blood, marriage, or adoption.

(12)  "Limited field of membership" means the defined group of persons designated as eligible for membership in the credit union who:

(a)  Have a similar profession, occupation, or formal association with an identifiable purpose; or

(b)  Reside within an identifiable neighborhood, community, rural district, or county; or

(c)  Are employed by a common employer; or

(d)  Are employed by the credit union; and

members of the immediate family of persons within such group.

(13)  "Shares" means that portion of the capital paid into the credit union by members on which dividends may be paid.

(14)  "Unimpaired capital" means capital which is not impaired by losses that exceed applicable reserves.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 7, 58, ch. 85-82; s. 1, ch. 91-307; ss. 1, 77, ch. 92-303.

657.003  Purposes.--A credit union is a cooperative, nonprofit association, organized under this chapter, for the purposes of encouraging thrift among its members, creating sources of credit at fair and reasonable rates of interest, and providing an opportunity for its members to use and control their resources on a democratic basis in order to improve their economic and social condition.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 91-307; s. 1, ch. 92-303.

657.005  Notice of intent to organize; investigation by department; application for authority to organize a credit union.--

(1)  The proposed organizers of the proposed credit union shall file with the department a notice of intent to organize, upon such form as the department may, by rule, prescribe.

(2)  Any five or more residents of this state who represent a limited field of membership may apply to the department for permission to organize a credit union. The fact that individuals within the proposed limited field of membership have credit union services available to them through another limited field of membership shall not preclude the granting of a certificate of authorization to engage in the business of a credit union.

(3)  The application shall be submitted to the department on forms and in the manner prescribed by rules adopted by the department and shall be accompanied by a nonrefundable filing fee of $250. Such application shall include:

(a)  The proposed name and the proposed location where the proposed credit union is to have its principal place of business.

(b)  Designation of the par value of each share of the credit union.

(c)  Designation of at least five persons who agree to serve on the board of directors, and at least three other persons who agree to serve on the supervisory committee or audit committee, with a signed agreement to serve in these capacities until the first annual meeting or until the election of their successors, whichever is later, executed by those who so agree.

(d)  Any information required by the department to be submitted to the corporation or insuring agency.

(e)  Bylaws of the credit union, which bylaws shall be in the form and substance as required by the department.

(4)  The department shall have the power of investigation to the extent necessary to make the finding required under this section.

(5)  The application shall be approved if the department determines that:

(a)  There is a showing of sufficient interest on the part of the proposed limited field of membership;

(b)  The qualifications of the proposed board of directors and committee members are such as to indicate a reasonable likelihood that the affairs of the proposed credit union will be administered consistently with sound financial and credit union practices;

(c)  The organization of the credit union would benefit its members; and

(d)  The limited field of membership is of sufficient financial viability to indicate reasonable promise of successful operation of the proposed credit union. In determining the financial viability of the proposed limited field of membership and chances for reasonable promise of success of the proposed credit union, the department shall consider:

1.  The size of the proposed limited field of membership, excluding potential members based upon familial relationships; and

2.  Any other evidence that tends to indicate the reasonable promise of success of the proposed credit union.

(6)  If the organization of a proposed credit union would result in an overlapping limited field of membership, the department may disapprove the application if it finds that the formation of the proposed credit union will result in a substantial, adverse financial impact to an existing credit union having the same or substantially the same limited field of membership.

(7)  Concurrently with submission of the application to the department, the applicant shall apply for insurance of accounts with the National Credit Union Administration.

(8)  The applicant shall not accept any payments for credit to share or deposit accounts, or commence business operations as a credit union, until the certificate of authorization and the insurance certificate have been delivered to the credit union.

(9)  The department shall perform a preopening examination to verify good faith compliance with all the requirements of law. If the department finds that such requirements have been met, it shall issue and deliver the certificate of authorization to transact business. Any credit union which fails to open for business within 6 months after the issuance of such certificate will forfeit its existence as a credit union, and the certificate of authorization shall be revoked. For good cause shown, the department may extend the opening date for an additional 6 months on its own motion or at the request of the credit union. Amounts credited on share accounts, less expenditures authorized by law, shall be returned pro rata to the respective account holders.

(10)  All preopening costs and expenses in connection with the organization of the credit union and preparation for opening for business may be paid only from funds provided by the organizers or a sponsor and may be reimbursed by the credit union only out of undivided earnings, after provision has been made for reserves and dividends. However, the credit union may reimburse, as an operating expense, for forms and supplies, insurance, rent, and other expenses applicable to or consumed in the period after opening in accordance with rules adopted by the department.

(11)  The department shall provide a form certificate of authorization and bylaws consistent with this chapter which shall be used by applicants for credit unions.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 12, 51, ch. 84-216; ss. 8, 58, ch. 85-82; s. 1, ch. 91-307; ss. 1, 79, ch. 92-303.

657.0061  Amendments to bylaws.--

(1)  All bylaw amendments must be submitted to the department. The department shall approve or disapprove bylaw amendments within 60 days after receipt. The department shall approve the proposed bylaw amendment unless it finds that the amendment:

(a)  Is not in the best interest of the membership;

(b)  Is not in accord with sound credit union practices; or

(c)  Exposes the assets of the credit union to unnecessary risks.

(2)  The department may, by rule, allow certain bylaw amendments that are ministerial in nature to become effective immediately upon filing with the department.

History.--s. 80, ch. 92-303.

657.008  Place of doing business.--

(1)  Every credit union authorized to transact business pursuant to the laws of this state shall have one principal place of doing business as designated in its bylaws.

(2)(a)  With 30 days prior written notification to the department, a credit union may maintain branches at locations other than its main office or relocate branches previously established if the maintenance of such branches is determined by the board of directors to be reasonably necessary to furnish service to its members.

(b)  Investments in such branch offices shall comply with the limitations imposed by s. 657.042(5).

(c)  If any branch is located outside this state, the cost of examining such branch shall be borne by the credit union. Such cost shall include, but shall not be limited to, examiner travel expense and per diem.

(3)  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.

(4)  Any credit union organized under this state or federal law, the members of which are presently, or were at the time of admission into the credit union, employees of the state or a political subdivision or municipality thereof, or members of the immediate families of such employees, may apply for space in any building owned or leased by the state or respective political subdivision or municipality in the community or district in which the credit union does business. The application shall be addressed to the officer charged with the allotment of space in such building. If space is available, the officer may allot space to the credit union at a reasonable charge for rent or services. If the governing body having jurisdiction over the building determines that the services rendered by the credit union to the employees of the governing body are equivalent to a reasonable charge for rent or services, available space may be allotted to the credit union without charge for rent or services. The officer charged with the allotment of space in such building shall report annually the terms and conditions of such use of space to the Auditor General.

(5)  A credit union may change its principal place of business within this state upon approval by the department.

(6)(a)  The department may authorize foreign credit unions to establish branches in Florida if all of the following criteria are met:

1.  The state in which the foreign credit union's home office is located permits Florida credit unions to do business in the state under restrictions that are no greater than those placed upon a domestic credit union doing business in that state. For this purpose, such restrictions shall include, but are not limited to, any fees, bonds, or other charges levied on domestic credit unions doing business in that state.

2.  The deposits of such foreign credit union and its proposed Florida branch will be insured or guaranteed by an insurer or guarantor acceptable to the department. Insurance or guarantee of accounts comparable to that provided by the Florida Credit Union Guaranty Corporation is deemed to be acceptable; however, acceptance of insurance or guarantee of accounts by any insuring or guaranteeing agencies or companies shall be subject to a determination by the department that the insuring or guaranteeing agency or company is in sound financial condition and that its reserves with respect to its insured or guaranteed accounts are no less than those of the Florida Credit Union Guaranty Corporation.

3.  The credit union's field of membership is so limited as to be within that meaning of that term as defined in s. 657.002.

(b)  Every foreign credit union operating in Florida shall keep the department informed of every location at which it is operating.

(c)  If the department has reason to believe that a foreign credit union is operating a branch in this state in an unsafe and unsound manner, it shall have the right to examine such branch. If, upon examination, the department finds that such branch is operating in an unsafe and unsound manner, it shall require the branch office to make appropriate modifications to bring such branch operations into compliance with generally accepted credit union operation in this state. Such foreign credit union shall reimburse the department for the full cost of this examination. Costs shall include examiner salaries, per diem, and travel expenses.

(d)  Any foreign credit union operating in this state shall in any connection therewith be subject to suit in the courts of this state, by this state and the citizens of this state.

(7)  A credit union may provide, directly or through a contract with another company, off-premises armored car services to its members. Armored car services do not constitute a branch for the purposes of this section.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 14, 51, ch. 84-216; ss. 9, 58, ch. 85-82; s. 1, ch. 91-307; ss. 1, 81, ch. 92-303; s. 8, ch. 93-111.

657.021  Board of directors; executive committee.--

(1)  The credit union shall have a board of directors consisting of at least five directors to be elected from the members in the manner prescribed in the bylaws.

(2)  Directors shall hold office for such terms as the bylaws provide.

(3)  Each director, upon assuming office, shall acknowledge that he or she is familiar with his or her responsibilities as a director and that he or she will diligently and honestly administer the affairs of such credit union and will not knowingly violate, or willfully permit to be violated, any of the provisions of the financial institution's codes or pertinent rules of the department. The signed copy of such oath shall be filed with the department within 30 days after election.

(4)  The board of directors shall fill any vacancies on the board by appointment until successors are elected as provided in the bylaws.

(5)  The board of directors and the executive committee shall meet as often as required in the bylaws.

(6)  The board of directors must determine the general direction of the business affairs, manage the funds, and maintain the records of the credit union in a manner that is consistent with safe and sound credit union practices.

(7)  The board of directors must exercise the following duties which are nondelegable:

(a)  Require any officer or employee who has custody of or handles funds to give bond with good and sufficient surety in an amount and character determined by the board of directors in compliance with rules adopted by the department.

(b)  Establish the maximum amount of credit which may be extended to a member and establish written credit policies, including, without limitation, security requirements and terms of repayment.

(c)  Establish written policies governing loans, investments, equity, personnel, collections, the conduct of officers, employees, and committee members, and continuing education for directors and committee members and other policies necessary for prudent credit union practices.

(d)  Declare any dividends on shares.

(e)  Adequately provide for reserves as required by this part or by rules or order of the department or as otherwise determined necessary by the board.

(f)  Employ a chief executive officer, whose title may be either president or general manager, or, in lieu thereof, designate the treasurer to act as the chief executive officer and to be in active charge of the affairs of the credit union.

(8)  The board of directors must exercise the following duties, which may be delegated within specific guidelines and policies established by board resolutions:

(a)  Act on applications for membership, or appoint one or more membership officers to approve or deny applications for membership, under such conditions as may be prescribed in the bylaws. A record of a membership officer's approval or denial of membership must be made available to the board for inspection. A person denied membership by a membership officer may appeal the denial to the board.

(b)  Determine, from time to time, the interest rate or rates which are charged on extensions of credit and authorize any interest refunds to members from income earned and received in proportion to the interest paid by them on such classes of credit and under such conditions as the board prescribes.

(c)  Determine the interest rates which will be paid on deposits and the manner of calculating those rates.

(d)  Invest funds, except that the board may designate an investment committee or any qualified individual to make investments pursuant to written policies established by the board.

(9)  The board of directors has authority, which may not be delegated, to:

(a)  Limit the number of shares and the amount of deposits which may be owned by a member, which limitation must apply to all members.

(b)  Designate a depository or depositories for the funds of the credit union.

(c)  Suspend and remove any member of any of its committees for failure to perform his or her duties or for other just cause.

(d)  Establish any committee determined to be necessary and appoint its membership.

(e)  Call special meetings of the members.

(10)  The board of directors has authority, which may be delegated within specific guidelines and policies established by board resolutions, to:

(a)  Authorize the employment of persons necessary to carry on the business of the credit union.

(b)  Authorize the purchase, lease, rental, or sale of personal property necessary to carry on the business of the credit union.

(c)  Borrow or lend money to carry on the functions of the credit union.

(11)  The board of directors may appoint an executive committee which may be authorized to act for the board in all respects, subject to such conditions and limitations as are prescribed by the board in writing. The executive committee shall be composed of the executive officers as defined in s. 657.022.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 10, 58, ch. 85-82; s. 3, ch. 90-51; s. 1, ch. 91-307; ss. 1, 82, ch. 92-303; s. 9, ch. 93-111; s. 533, ch. 97-102.

657.022  Executive officers.--

(1)  At the organizational meeting and within 7 days following each annual meeting of the members, the directors shall hold the annual meeting of the board of directors and elect from their own number a presiding officer, who may be designated as chair of the board or president; one or more vice chairs or one or more vice presidents, as the case may be; 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 organization.

(2)  The terms of the executive officers shall be 1 year, or until their successors are chosen and have duly qualified.

(3)  The duties of the executive officers shall be prescribed in the bylaws.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 91-307; s. 1, ch. 92-303; s. 534, ch. 97-102.

657.023  Membership.--

(1)  Upon payment of any required entrance or membership fee, payment of shares as required by the bylaws, and compliance with the bylaws, any person within the limited field of membership of a credit union may be admitted to its membership.

(2)  Members of the credit union shall not be personally or individually liable for payment of the debts of the credit union.

(3)  A credit union may not restrict any member's rights, except that the credit union may close the account and terminate the membership of any member whose actions have resulted in any financial loss to the credit union.

(4)  Denial of membership hereunder shall not be considered to be a denial of credit.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 6, 46, ch. 82-214; s. 1, ch. 91-307; ss. 1, 83, ch. 92-303.

657.024  Membership meetings.--

(1)  The members shall receive timely notice of the annual meeting and any special meetings of the members, which shall be held at the time, place, and in the manner provided in the bylaws.

(2)  Each member shall have one vote. Mail ballots may be distributed in advance to the entire membership as prescribed in the bylaws. No person shall exercise the vote of any other member.

(3)  Any organization, association, or corporation having membership may be represented and have its vote cast by its delegated agent.

(4)  The members shall elect the board of directors and other committees prescribed in the bylaws and transact such other business as the bylaws permit.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 91-307; s. 1, ch. 92-303.

657.026  Supervisory or audit committee.--

(1)  There shall be a supervisory or audit committee of at least three members, which may be elected by the membership or appointed by the board, or the board may appoint an audit committee of directors in the manner prescribed in the bylaws. An officer or employee may not serve on the supervisory or audit committee.

(2)  The supervisory or audit committee may audit, or cause to be audited, the financial statements of the credit union to determine compliance with policy, to ensure that generally accepted accounting principles are consistently applied, and to ensure an adequate system of internal controls.

(3)  The supervisory or audit committee shall:

(a)  Make or cause to be made a comprehensive annual audit of the credit union, in accordance with the rules of the department.

(b)  Make or cause to be made such supplementary audits or examinations as it deems necessary or as are requested by the board of directors or the department.

(c)  Submit a report of every required audit or examination within a reasonable time to the board of directors with a copy to the department and, depending upon which organization is applicable, a copy to the corporation or the National Credit Union Administration.

(d)  Make a summary report, to the membership at the annual meeting, of any audits or examinations conducted during the preceding year.

(4)  The supervisory or audit committee shall notify the board of directors, the department, and, as applicable, either the corporation or the National Credit Union Administration of any violation of this part, any violation of the certificate of authorization or bylaws of the credit union, or any practice of the credit union deemed by the supervisory or audit committee to be unsafe, unsound, or unauthorized.

For the purposes of this subsection, two-thirds of the members of the supervisory or audit committee constitutes a quorum.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 82-46; ss. 11, 58, ch. 85-82; ss. 1, 2, ch. 91-307; ss. 1, 2, 84, ch. 92-303.

657.0265  Liability of credit union directors, supervisory committee members, or audit committee members.--

(1)  A director of a credit union organized under state or federal law, or a member of the supervisory or audit committee of such credit union, is not personally liable for monetary damages to the credit union, its members, or any other persons for any statement, vote, decision, or failure to act, regarding the management or policy of the credit union, unless:

(a)  The director or the member of the supervisory or audit committee breached or failed to perform her or his duties as a director or as a member of the supervisory or audit committee; and

(b)  The breach or failure to perform by the director or the member of the supervisory or audit committee constitutes:

1.  A violation of the criminal law, unless the director or the member of the supervisory or audit committee had reasonable cause to believe her or his conduct was lawful or had no reasonable cause to believe her or his conduct was unlawful. A judgment or other final adjudication against a director or a member of a supervisory or audit committee in any criminal proceeding for a violation of the criminal law estops that director or member of the supervisory or audit committee from contesting the fact that her or his breach or failure to perform constitutes a violation of the criminal law, but does not estop the director or member of the supervisory or audit committee from establishing that she or he had reasonable cause to believe that her or his conduct was lawful or had no reasonable cause to believe that her or his conduct was unlawful;

2.  A transaction from which the director or the member of the supervisory or audit committee derived an improper personal benefit, either directly or indirectly; or

3.  Recklessness or an act or omission which was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property.

(2)  For the purposes of this section, the term "recklessness" means the acting, or omission to act, in conscious disregard of a risk that is:

(a)  Known, or so obvious that it should have been known, to the director or member of the supervisory or audit committee; and

(b)  So great as to make it highly probable that harm would follow from such action or omission.

History.--s. 7, ch. 87-245; s. 1, ch. 91-307; ss. 1, 85, ch. 92-303; s. 535, ch. 97-102.

657.027  Credit committee and credit manager.--

(1)  The board of directors may appoint or the members may elect, as provided in the bylaws, a credit committee composed of at least three members, for such terms as the bylaws provide.

(a)  The credit committee shall have the general supervision of all applications for credit by members, pursuant to written policies established by the board of directors.

(b)  The credit committee shall meet as often as the business of the credit union requires and not less frequently than once a month to consider applications for credit. No credit shall be extended unless it is approved by a majority of a quorum of the committee. A quorum shall consist of not less than a majority of the entire committee.

(c)  The credit committee may appoint one or more loan officers and delegate to them the power to approve or disapprove credit subject to such limitations or conditions as the credit committee prescribes. Credit applications not acted upon by a loan officer shall be reviewed and acted upon by the credit committee.

(2)  In lieu of a credit committee, the board of directors may provide for a credit manager to approve or disapprove credit under written conditions prescribed by the board. The board of directors may designate and empower the chief executive officer as the credit manager, or may authorize the chief executive officer to employ a credit manager, as provided in the bylaws. In the event a credit manager is designated or employed, the procedures prescribed in subsection (1) do not apply, and no credit shall be extended unless approved by the credit manager; except that the credit manager may appoint one or more loan officers with the power to approve or disapprove credit, subject to such limitations or conditions as prescribed by the chief executive officer.

History.--ss. 1, 6, ch. 80-258; s. 442, ch. 81-259; ss. 2, 3, ch. 81-318; s. 1, ch. 82-46; ss. 12, 58, ch. 85-82; ss. 1, 2, ch. 91-307; ss. 1, 2, 86, ch. 92-303.

657.028  Activities of directors, officers, committee members, employees, and agents.--

(1)  An individual may not disburse funds of the credit union for any extension of credit approved by her or him.

(2)  An elected officer or director or any committee member, other than the treasurer or the chief executive officer serving in the capacity of treasurer, may not be compensated for her or his service as such.

(3)  A person may not serve as an officer, director, or committee member of a credit union if she or he:

(a)  Has been convicted of a felony or of an offense involving dishonesty, a breach of trust, a violation of this chapter, or fraud, except with the prior approval of the department upon a showing of rehabilitation;

(b)  Has been adjudicated bankrupt within the previous 7 years;

(c)  Has been removed by any regulatory agency as a director, officer, committee member, or employee of any financial institution, except with the prior approval of the department upon a showing of rehabilitation and upon showing of ability to be bondable;

(d)  Has performed acts of fraud or dishonesty, or has failed to perform duties, resulting in a loss which was subject to a paid claim under a fidelity bond, except with the prior approval of the department upon a showing of rehabilitation and upon showing of ability to be bondable; or

(e)  Has been found guilty of a violation of s. 655.50, relating to the Florida Control of Money Laundering in Financial Institutions Act; chapter 896, relating to offenses related to financial transactions; or any similar state or federal law.

(4)  A person may not serve as a director of a credit union if she or he is an employee of the credit union other than the chief executive officer of the credit union.

(5)  A director, committee member, officer, agent, or employee of the credit union may not in any manner, directly or indirectly, participate in the deliberation upon or the determination of any question affecting her or his pecuniary interest or the pecuniary interest of any corporation, partnership, or association, other than the credit union, in which she or he or a member of her or his immediate family is directly or indirectly interested.

(6)  Within 30 days after election or appointment, a record of the names and addresses of the members of the board, members of committees, and all officers of the credit union shall be filed with the department on forms prescribed by the department.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 91-307; ss. 1, 87, ch. 92-303; s. 536, ch. 97-102.

657.031  Powers.--A credit union shall have the power to:

(1)  Make contracts.

(2)  Sue and be sued.

(3)  Acquire, lease, hold, and dispose of real and personal property necessary or incidental to its operations.

(4)  Incur and pay necessary and incidental operating expenses.

(5)  Require an entrance or membership fee.

(6)  Receive shares and deposits from its members and other credit unions; however, no credit union shall receive shares or deposits from persons, other than credit unions, who are not members of the credit union, except to a joint account in which at least one of the tenants is a member of the credit union.

(7)  Allow withdrawal of shares and deposits, as requested by a member orally, in writing, or through any other means of communication, including, but not limited to, drafts drawn on the credit union for payment to the member or any third party.

(8)  Charge fees for its services.

(9)  Extend credit to its members.

(10)  Borrow money and issue evidences of indebtedness for a loan or loans in the usual course of its business and secure such obligations by mortgage or pledge of any of its assets. Aggregate borrowings shall not exceed 50 percent of the unimpaired capital of the credit union. However, this percentage limitation shall not apply to loans from the corporation or from the National Credit Union Administration.

(11)  Discount and sell notes and obligations.

(12)  Sell all or any portion of its assets to another credit union or purchase all or any portion of the assets of another credit union.

(13)  Invest funds, as provided in this part.

(14)  Maintain deposits in insured financial depository institutions.

(15)  Assess charges to its members.

(16)  Hold membership in central credit unions or corporate credit unions organized under this part or under any other state or federal acts and membership in associations and organizations of credit unions.

(17)  Declare and pay dividends on shares, contract for and pay interest on deposits, and pay refunds of interest on loans.

(18)  Collect, receive, and disburse funds in connection with the sale of negotiable and nonnegotiable instruments and for such other purposes as may provide benefits or conveniences to its members.

(19)  Perform tasks and render any services requested by the Federal Government or by this state or any agency, political subdivision, or municipality thereof, if approved by the department.

(20)  Participate in, hold membership in, and pay dues to any organization the services of which will benefit the credit union or its membership.

(21)  Make donations for the members' welfare or for civic, charitable, scientific, or educational purposes as authorized by the board of directors.

(22)  Contract for the provision of trust services to its members with a trust company or other financial depository institution with trust powers authorized to do business in this state, with representatives of the trust company or other financial depository institution with trust powers being authorized to serve members from credit union facilities on a full-time or part-time basis.

(23)  Act as trustee of funds permitted by federal law to be deposited in a credit union as a deferred-compensation or tax-deferral device, including, but not limited to, Individual Retirement Accounts as defined by the Internal Revenue Code.

(24)  Purchase reasonable disability insurance, including accidental death benefits, for directors and committee members through insurance companies licensed to do business in this state.

(25)  Reimburse directors and committee members for reasonable and necessary expenses incurred in the performance of their duties.

(26)  Participate in systems which allow the transfer, withdrawal, or deposit of funds of credit unions or credit union members by automated or electronic means and hold membership in entities established to promote and effectuate these systems, provided such participation is not inconsistent with those rules of the department adopted to further service to the members and to protect members' funds against unreasonable risks.

(27)  Issue credit cards and debit cards to allow members to obtain access to their shares, deposits, and extensions of credit, provided such issuance is not inconsistent with the rules of the department. The department may, by rule, allow the use of devices similar to credit cards and debit cards to allow members to obtain access to their shares, deposits, and extensions of credit.

(28)  Perform any act necessary to obtain and maintain membership in the corporation or obtain and maintain insurance of accounts through the National Credit Union Administration.

(29)  Exercise such incidental powers as are necessary or requisite to effectively carry out the purposes for which it is organized, provided such exercise is approved by rule or order of the department.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 5, 46, ch. 82-214; ss. 13, 58, ch. 85-82; s. 1, ch. 91-307; ss. 1, 88, ch. 92-303.

657.0315  Contracts for providing goods, products, or services.--

(1)  A credit union may not enter into a written or oral contract with any person to provide goods, products, or services to or for the benefit of the credit union if the performance of such contract would adversely affect the safety or soundness of the credit union, and the contract is voidable.

(2)  Enforcement of this section may be made only by the board of directors of the credit union, unless the contract had been authorized by specific action of the board; by the corporation or National Credit Union Administration if it is directed to assume control of the assets and business of the credit union pursuant to s. 657.062; or by the liquidator appointed pursuant to s. 657.063 or s. 657.064.

History.--s. 89, ch. 92-303.

657.033  Accounts.--

(1)  Shares may be paid for and transferred in such manner as the bylaws prescribe. At such intervals and for such periods as the board of directors may authorize, and after provisions are made for the required reserves, the board of directors may declare dividends, to be paid from the undivided earnings at such rates and upon such classes of shares as are determined by the board.

(2)  The credit union may require not more than 60 days' notice of a member's intention to withdraw shares and deposits.

(3)  A credit union may receive deposits from its members and contract to pay interest thereon, subject to conditions the board of directors establishes and subject to rules of the department.

(4)  The credit union shall have a lien and right of setoff on the shares, deposits, and accumulated dividends or interest in any member's individual, joint, or trust account for any sum due the credit union from that member.

(5)  When there has not been any activity generated by the member on the account for 24 months, such account shall be considered a dormant account and shall be placed under an accounting control system.

(6)  If the owner of a dormant account, a person named on the account, or the beneficiary of the account has not had any activity with a credit union for 7 years and the whereabouts of those interested parties are unknown to the credit union, that account is unclaimed or abandoned property and shall be maintained pursuant to chapter 717.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 91-307; ss. 1, 90, ch. 92-303.

657.0335  Additional power to restrict withdrawals.--In extraordinary circumstances external to the operations of the credit union which threaten the continued existence and operation of the credit union, the department may restrict withdrawals for a period not to exceed 60 days.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 91-307; s. 1, ch. 92-303.

657.038  Loan powers.--

(1)  A credit union may extend credit to members for such purpose and upon such security and terms as the credit committee, credit manager, or loan officer approves, pursuant to written loan policies established by the board of directors, or as may otherwise be provided by law.

(2)  The total unsecured obligations outstanding from any member must not exceed the greater of $500 or 15 percent of the equity of the credit union.

(3)  The total obligations outstanding from any member must not exceed the greater of $1,000 or 25 percent of the equity of the credit union. The limitations provided in this subsection do not apply to loans which are fully secured by assignment of shares or deposits in the lending credit union.

(4)  A member may receive credit in installments or in one sum and may pay the whole or any part of his or her indebtedness on any day on which the office of the credit union is open for business.

(5)  The credit committee or credit manager may approve in advance, upon request of a member, a line of credit, and disbursements may be granted to such member within the limit of such line of credit. When a line of credit has been approved, no additional credit applications are required as long as the aggregate obligation does not exceed the limit of such line of credit; however, no additional disbursements may be made to any member whose existing extensions of credit are in default or are subject to adverse classification without receiving current financial information.

(6)  Loans secured by mortgages on real property must be made in accordance with written policies of the board of directors and rules of the department.

(7)  As used in this section, the term "related interest" means a person's interest in a partnership as a general partner, and any limited partnership, corporation, or other business organization controlled by that person. A limited partnership, corporation, or other business organization is controlled by a person who:

(a)  Owns, controls, or has the power to vote 25 percent or more of any class of voting securities of any such business organization;

(b)  Controls in any manner the election of a majority of the directors of any such business organization; or

(c)  Has the power to exercise a controlling influence over the management or policies of such business organization.

(8)  In computing the total liabilities of any person, all loans endorsed or guaranteed as to repayment by such person and by any related interest of such person must be included.

(9)  A loan may not be made to any corporation, except to the Florida Credit Union Guaranty Corporation, Inc., or a corporation in which the credit union holds an equity interest.

(10)  The loan limitations stated in this section shall not be enlarged by the provision of any other section of this chapter.

(11)  Any approval of extension of credit requiring approval of the board of directors shall be recorded in the minutes of the board, including the borrower's account number or other code, the amount of the loan, the maturity of the loan, and the general type of security.

(12)  The department may adopt rules to provide for minimum documentation and safe lending procedures necessary to protect the members' funds.

(13)  A credit union may participate in extensions of credit to its members jointly with other credit unions, corporations, or financial institutions.

(14)  A credit union may participate in guaranteed loan programs of the federal and state governments, provided the borrower is a member of the credit union.

(15)  If approved by the board of directors, a credit union may extend credit to other credit unions, or to the corporation, in an amount not greater than 25 percent of the unimpaired capital of the lending credit union.

(16)  A credit union may purchase the conditional sales contracts, notes, and similar instruments of its members, provided that the credit union could have originally made the loan to the member.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 16, 50, 51, ch. 84-216; s. 1, ch. 91-307; ss. 1, 91, ch. 92-303; s. 537, ch. 97-102.

657.039  Loan powers; extension of credit to directors, officers, committee members, and certain employees.--

(1)  A credit union may extend credit to its officers, directors, credit manager, members of its supervisory, audit, and credit committees, and any other person authorized to approve extensions of credit, provided:

(a)  The extension of credit complies with all requirements under this part with respect to credit extended to other borrowers and is not on terms more favorable than those extended to other borrowers.

(b)  The loan or aggregate of loans to any person or any related interest of any person covered by this section which exceeds $5,000, except for share-secured or deposit-secured credit, is approved in advance by the board of directors with any interested person abstaining from voting.

(c)  Approved lines of credit, such as open-end loans, may be funded without further approval by the board, but all extensions of credit over $5,000 to such persons must be reviewed at least annually by the board of directors. Closed-end loans which have been fully funded do not require annual review.

(2)  As used in this section, the term "related interest" means a person's interest in a partnership as a general partner, and any limited partnership, corporation, or other business organization controlled by that person. A limited partnership, corporation, or other business organization is controlled by a person who:

(a)  Owns, controls, or has the power to vote 25 percent or more of any class of its voting securities;

(b)  Controls in any manner the election of a majority of its directors; or

(c)  Has the power to exercise a controlling influence over its management or policies.

(3)  In computing the total liabilities of any person, all loans endorsed or guaranteed as to repayment by such person and by any related interest of such person must be included.

(4)  The limitations stated in this section shall not be enlarged by the provision of any other section of this chapter.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 14, 58, ch. 85-82; s. 1, ch. 91-307; ss. 1, 92, ch. 92-303.

657.041  Insurance.--

(1)  A credit union may purchase for or make available to its members credit life insurance, credit disability insurance, life savings or depositors life insurance, or any other insurance coverage which may be directly related to the extension of credit or to the receipt of shares or deposits in amounts related to the members' respective ages, shares, deposits, or credit balances, or to any combination thereof.

(2)  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 arising out of such person's capacity or status with the credit union, whether or not the credit union would have the power to indemnify such person against the asserted liability.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 91-307; s. 1, ch. 92-303.

657.042  Investment powers and limitations.--A credit union may invest its funds subject to the following definitions, restrictions, and limitations:

(1)  INVESTMENTS NOT SUBJECT TO LIMITATIONS.--There is no limitation with respect to the capital of the investing credit union on the following investments:

(a)  Direct obligations of the United States Government.

(b)  Obligations of agencies created by the United States Congress and authorized thereby to issue securities or evidences of indebtedness, regardless of guarantee of repayment by the United States Government.

(c)  Public housing authority obligations.

(d)  General obligations of the states of the United States and of the political subdivisions and municipalities thereof.

(e)  Obligations issued by the State Board of Education under authority of the Constitution or applicable statutes.

(f)  Tax anticipation certificates or warrants of counties or municipalities having maturities not exceeding 1 year.

(g)  The assets of liquidating credit unions in this state, provided such assets are otherwise eligible for investment by the acquiring credit union.

(h)  The shares and deposit accounts of corporate credit unions and any other fund established by this state or by the Federal Government for the purpose of maintaining liquidity in credit unions; however, such investments shall not exceed the amount required for the purpose of meeting the daily needs of the investing credit union for operating liquidity.

(i)  Stock of the Federal National Mortgage Association, or any other similar entity designated by the department, designed to promote investment in residential mortgages, which may be purchased and retained as required in connection with mortgage transactions with the association or entity.

(2)  INVESTMENTS SUBJECT TO LIMITATION OF 25 PERCENT OF CAPITAL OF THE CREDIT UNION.--Up to 25 percent of the capital of the credit union may be invested in:

(a)  The shares or deposit accounts in any one corporate credit union or other insured financial depository institution. The credit union may exceed the 25-percent investment limitation in the corporate credit union, subject to the prior written approval of the department.

(b)  Federal funds, daily; however, a credit union may not sell at any one time federal funds to any individual institution in an amount exceeding 100 percent of the equity of the selling credit union.

(c)  Bankers' acceptances that are eligible for purchase by Federal Reserve Banks.

(3)  INVESTMENT SUBJECT TO LIMITATION OF TWO PERCENT OF CAPITAL OF THE CREDIT UNION.--

(a)  Up to 2 percent of the capital of the credit union may be invested in the capital shares, obligations, or preferred stock issues of any agency or association, or membership association, provided the membership or stockholdings, as the case may be, of such agency or association are primarily confined or restricted to credit unions or organizations of credit unions and provided the purposes for which such agency or association is organized are designed primarily to service or otherwise assist credit union operations.

(b)  Commercial paper and bonds of any corporation within the United States which have a fixed maturity, as provided in subsection (7), except that the total investment in all such paper and bonds may not exceed 10 percent of the capital of the credit union.

(4)  INVESTMENT SUBJECT TO LIMITATION OF ONE PERCENT OF CAPITAL OF THE CREDIT UNION.--Up to 1 percent of the capital of the credit union or $15,000, whichever is greater, may be invested in any of the following:

(a)  Corporate obligations of any one corporation which is an affiliate or subsidiary of the credit union or a service corporation, except that the total investment in all such corporate obligations shall not exceed 10 percent of the capital of the credit union.

(b)  Any capital participation instrument or evidence of indebtedness issued by the Florida Black Business Investment Board pursuant to the Florida Small and Minority Business Assistance Act of 1985.

(5)  INVESTMENTS IN REAL ESTATE AND EQUIPMENT FOR THE CREDIT UNION.--

(a)  Up to 5 percent of the capital of the credit union may be invested in real estate and improvements thereon, furniture, fixtures, and equipment utilized or to be utilized by the credit union for the transaction of business.

(b)  The limitations provided by this subsection may be exceeded with the prior written approval of the department. The department shall grant such approval if it is satisfied that:

1.  The proposed investment is necessary.

2.  The amount thereof is commensurate with the size and needs of the credit union.

3.  The investment will be beneficial to the members.

(6)  INVESTMENTS SUBJECT TO DEPARTMENT APPROVAL.--A credit union may invest its funds in such other investments, including the capital stock of other financial institutions, as the department approves by rule or order.

(7)  SPECIAL PROVISIONS.--

(a)  None of the bonds or other obligations described in this section shall be eligible for investment by credit unions in any amount unless current as to all payments of principal and interest and unless rated in one of the four highest classifications, or, in the case of commercial paper, unless it is of prime quality and of the highest letter and numerical rating, as established by a nationally recognized investment rating service, or any comparable rating as determined by the department.

(b)  With prior approval of the department, any investment permitted in this section may also be made indirectly by investment in a trust or mutual, the investments of which are limited as set forth in this section, provided that the credit union must maintain a current file on each investment which contains sufficient information to determine whether the investment complies with the requirements of this section. If the investment fails to comply with the requirements of this section, the credit union must divest itself of its investment, unless otherwise approved by the department.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 8, 46, ch. 82-214; ss. 15, 58, ch. 85-82; ss. 17, 32, ch. 85-104; s. 1, ch. 91-307; ss. 1, 93, ch. 92-303; s. 28, ch. 94-322.

657.043  Reserves.--

(1)  TRANSFERS TO REGULAR RESERVE.--Immediately before paying each dividend, the total of all income for the period shall be determined. From this amount, there shall be set aside sums as a regular reserve in accordance with the following schedule:

(a)  A credit union shall set aside:

1.  Five percent of the total of all income for the period, until the regular reserve equals 6 percent of the risk assets, then,

2.  Two percent of the total of all income for the period, until the regular reserve equals 8 percent of the risk assets.

(b)  Whenever the ratio of regular reserves to risk assets falls below the stated percent, it shall be replenished by regular contributions as provided in paragraph (a).

(c)  The department may decrease the reserve requirements set forth in this subsection when in its opinion such a decrease is necessary to preserve the fiscal soundness of the credit union.

(2)  ALLOWANCE FOR LOAN LOSSES ACCOUNT.--The credit union shall maintain an account for loan losses. The amount in the account must equal the board's estimate of losses in the loan portfolio and be consistent with the rules of the department. The account must be provided for, before paying a dividend, in the manner provided by rule. This account constitutes part of the regular reserve for the purpose of determining the ratio of regular reserves to risk assets.

(3)  USE OF REGULAR RESERVE.--The regular reserve shall belong to the credit union and shall be used to meet losses. In the event of a decrease, the department may require additional transfers to the regular reserve above the amount required by subsection (1) until the decrease has been restored. The regular reserve may not be decreased without the prior written approval of the department or as provided by rule.

(4)  RISK ASSETS DEFINED.--The following assets shall be considered risk assets:

(a)  All loans, except:

1.  Loans fully secured by a pledge of shares or deposits in the lending credit union, equal to and maintained to at least the amount of the loan outstanding.

2.  Loans which are purchased from liquidating credit unions and guaranteed by the corporation or insured by the National Credit Union Administration or other insuring agencies.

3.  Investments in or loans to the corporation.

(b)  All investments that have remaining maturities greater than 3 years, unless a specific reserve has been established to mark the investment to current market value.

(c)  Uninsured or nonguaranteed deposits and shares in financial depository institutions, except deposits in the Federal Reserve Bank, the Federal Home Loan Bank, the Southeast Corporate Federal Credit Union, and any other corporate credit union.

(d)  All investments in commercial paper and bonds.

(e)  All investments in banker's acceptances.

(f)  All investments in federal funds.

(g)  All investments that are authorized pursuant to subsection (6) or subsection (7).

(h)  Fixed assets greater than the statutory limit imposed by this chapter, unless a specific reserve has been established for the excess.

(5)  ALLOWANCE FOR INVESTMENT LOSSES.--The credit union may maintain a contra asset account to provide an allowance for investment losses, which will not be included in the determination of equity. The account must be maintained consistent with the rules of the department.

(6)  SPECIAL RESERVES.--In addition to such regular reserve, special reserves shall be established:

(a)  To protect members against losses resulting from credit extended or from risk assets when required by rule, or when found by the department, in any special case, to be necessary for that purpose; or

(b)  As authorized by the board of directors.

(7)  RESERVE FOR CONTINGENCIES.--The board of directors may, after the regular reserve required by this section and rules of the department has been set aside, transfer a portion of undivided earnings to an auxiliary reserve account to provide for additional possible losses and expenses.

(8)  RESERVES.--The ratio of equity to total assets for each credit union must be maintained at not less than 5 percent. At the end of the calendar quarter when this ratio is determined to be less than 5 percent, the credit union shall, within 60 days thereafter, prepare and file with the department for approval a plan to achieve the minimum ratio within 4 years, or such longer period of time approved by the department. Once achieved, each credit union must maintain a ratio of equity to total assets of not less than 5 percent, unless otherwise authorized by the department. The department, by rule, shall prescribe the information, types of restrictions and limitations on operations, reporting requirements, and other criteria that are required to be included in an acceptable plan. An acceptable plan must recognize the unique characteristics and risk differences for the individual credit union.

(9)  GUARANTY ASSISTANCE AGREEMENT.--The amount of any liability arising out of a guaranty assistance agreement with the corporation or National Credit Union Administration must be maintained as a reserve and be included in the determination of undivided earnings of the credit union.

History.--ss. 1, 6, ch. 80-258; s. 443, ch. 81-259; ss. 2, 3, ch. 81-318; ss. 16, 58, ch. 85-82; s. 1, ch. 91-307; ss. 1, 94, ch. 92-303; s. 10, ch. 93-111.

657.051  Fiscal year.--The fiscal year of the credit union shall end on the last day of December.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 91-307; s. 1, ch. 92-303.

657.053  Assessments; state credit unions.--Each state credit union shall pay to the department a semiannual assessment equal to $500 plus 15 cents for each $1,000 of total assets. The amounts of all assessments provided for in this section shall be deemed to be maximum amounts. The department has the authority to establish, by rule, and from time to time to change, assessments in amounts less than the maximum amounts stated in this section.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 17, 51, ch. 84-216; s. 1, ch. 87-191; s. 4, ch. 90-197; s. 1, ch. 91-307; ss. 1, 95, ch. 92-303; s. 3, ch. 96-168.

657.055  Retention and destruction of certain records.--

(1)  The following credit union records must be retained permanently in either their original form or copied photographically, microphotographically, or on archival computer media:

(a)  Charter, bylaws, and amendments.

(b)  Certificates of share insurance or any license to operate under a program of any government agency.

(c)  General ledger and supporting subsidiary ledgers.

(d)  Minutes of meetings of the members, board of directors, credit committee, audit committee, and supervisory committee.

(e)  Supervisory or audit committee annual audit report, or equivalent examination report by a certified public accountant, and any attachments.

(f)  Listings of records destroyed.

(2)  The following credit union records, if used, must be retained in either their original form or copied photographically, microphotographically, or on archival computer media for a period of at least 5 years after January 1 of the year following the date the records are made or filed:

(a)  Balance sheets and statements of income and expenses.

(b)  Individual share and loan records.

(c)  Journal and cash records.

(d)  Cash account reconcilements.

(e)  Dividend records.

(f)  Expense records.

(g)  Reports of financial condition.

(h)  Matured investment records.

(i)  Supervisory or audit committee summary of account verification or the equivalent prepared by a certified public accountant.

(j)  Closed applications for membership and share account agreements.

(3)  No liability shall accrue against any credit union destroying any such records after the expiration of the period provided in subsection (2), and in any cause or proceedings in which any such records or files are called into question or demanded of the credit union or an employee thereof, a showing that such records or files have been destroyed in accordance with the terms of this section constitutes a sufficient excuse for the failure to produce them.

(4)  Any credit union may photograph, microphotograph, use archival computer media, or reproduce on film, in such manner that each page is exposed in its entirety, any of its journals, ledgers, statements, account books, other books, or internal records of every description made or received in the regular course of its business, and the photographs, microphotographs, archival computer media, or reproductions on film in the form of film, prints, or enlarged prints, or any duly certified or authenticated copy or reproduction thereof, duly certified or authenticated by a responsible officer of the credit union under whose supervision the records are kept shall, in all cases and in all courts and places, be admitted and received as evidence with a like force and effect as the original general ledger, voucher, statement, account book, or other record.

(5)  Retention requirements of federal laws must be satisfied pursuant to appropriate federal regulations.

(6)  This section shall, so far as applicable, apply to the records of federal credit unions operating in this state.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 9, 46, ch. 82-214; s. 1, ch. 91-307; ss. 1, 96, ch. 92-303.

657.062  Assumption of control by guarantor or insurer.--

(1)  The department may direct the corporation or the National Credit Union Administration, whichever is applicable, to assume control of the property, assets, and business of its member credit union and to operate it subject to the directions of the department:

(a)  Whenever the department finds that the credit union:

1.  Is engaging or has engaged in an unsafe or unsound practice;

2.  Is violating or has violated any provision of this chapter; or

3.  Is violating or has violated any department rule, department order, or written agreement entered into with the department,

in such a manner that the credit union is threatened with imminent insolvency.

(b)  Whenever a majority of the members of the board of directors of the credit union have been removed by the department or shall have resigned.

(2)  Except when prohibited by federal or state law, in the event of assumption of control, the guarantor or insurer may elect the board of directors and the operating committees and may, without penalty or liability, prepay any deposit accounts; terminate any contracts or agreements with employees, independent contractors, or consultants; terminate any contract or agreement with any person to provide goods, products, or services if the performance of such contract would adversely affect the safety or soundness of the credit unions or if such contract was entered into in violation of s. 657.0315(1); and terminate or assign any lease for property. The authority of the guarantor or insurer to continue operation of a credit union shall continue for a period not to exceed 180 days, unless extended by the department for an additional period not to exceed 180 days at the request of the guarantor or insurer, or unless involuntary liquidation proceedings have been initiated by the department. In the event that the guarantor or insurer does assume control pursuant to the direction of the department, a meeting of the credit union shall be called within 180 days, or within the period of extension as approved by the department, for the specific purpose of electing a new board of directors, who shall take office when the guarantor or insurer surrenders control, or considering such other recommendations as the guarantor or insurer and the department may make.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 17, 58, ch. 85-82; s. 1, ch. 91-307; ss. 1, 97, ch. 92-303.

657.063  Involuntary liquidation.--

(1)  If the department finds that any credit union is bankrupt or insolvent, or is transacting its business in an unsound, unsafe, or unauthorized manner such that it is threatened with imminent insolvency, and liquidation is in the best interest of the members, the department may, in its discretion, order the credit union placed in involuntary liquidation and designate and appoint a liquidator to take charge of the assets and affairs of the credit union. The order shall set forth the specific findings and reasons for the action taken.

(2)  The liquidator must be appointed by the department. The corporation or the National Credit Union Administration, whichever is applicable, must be given the right of first refusal. The department may appoint another entity if refused by the primary guarantor or insurer.

(3)  Upon appointment and in accordance with the directions of the department, the liquidator shall take possession and charge of all of the assets, books, and records of the credit union and shall take charge of the affairs, business, and operations of the credit union and shall have all of the powers of the board of directors, credit committee, credit manager, and supervisory committee of the credit union. The liquidator shall continue the business operation of the credit union for a period not to exceed 180 days, subject to the direction of the department. The liquidator shall have full authority to make loans and investments and to permit deposits to or withdrawals from accounts by members, except that during the period of such operation by the liquidator, no withdrawal from any account or accounts which are not fully insured or guaranteed shall be permitted. Except when prohibited by federal or state law, the liquidator may, without penalty or liability, prepay any deposit accounts; terminate any contracts or agreements with employees, independent contractors, or consultants; terminate any contract or agreement that was entered into in violation of s. 657.0315(1) or s. 657.062(2); and terminate or assign any lease for property. The liquidator shall proceed with a liquidation of assets by sale or transfer of assets and conversion of assets into cash or liquid investments in preparation for distribution to members on account of shares and deposits. The liquidator shall have specific authority to sell loan assets. The liquidator may enter into agreements for the sale or transfer of loans and other assets with the assumption of outstanding share and deposit accounts, which assumption constitutes full and complete distribution to members on account of shares and deposits.

(4)  On the completion of the liquidation and certification by the liquidator that the distribution of the assets of the credit union has been completed, the department shall cancel the certificate of authorization of the credit union. The department may designate a custodian to maintain the books and records of the liquidated credit union.

(5)  When the liquidating agent of the credit union has been appointed, the department may waive or deem inapplicable the fees required by this chapter and the examination required by s. 655.045(1)(a), provided the liquidating agent submits periodic reports to the department on the status of the liquidation.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 10, 46, ch. 82-214; ss. 18, 58, ch. 85-82; s. 1, ch. 91-307; ss. 1, 98, ch. 92-303.

657.064  Voluntary liquidation.--A credit union may elect to dissolve voluntarily and liquidate its affairs in the following manner:

(1)  Before considering any resolution pertaining to voluntary liquidation by the board of directors, the credit union must inform the department and the corporation or the National Credit Union Administration, whichever is applicable, of the time and place of the meeting of the board of directors. The notification must be transmitted at least 5 days before the board of directors meets.

(2)  The board of directors, pursuant to this section, shall, by resolution, recommend to the membership that the credit union be dissolved and shall state the board's reasons for such recommendation.

(3)  Within 10 days after adoption by the board of directors of the resolution proposing voluntary liquidation, a copy of the resolution shall be mailed to each member, giving notice of the time, location, and purpose of a special membership meeting, which must be held not less than 10 nor more than 20 days following the mailing of the resolution. Included in this notice shall be a mail ballot, allowing each member to vote in favor of or against the proposed voluntary liquidation. All ballots which are received by the credit union prior to the time set for the special membership meeting shall be counted together with the ballots cast at the meeting to determine whether the membership approves of the voluntary liquidation. Adequate procedures shall be established to provide that each member shall have but one vote. A majority of the votes cast by the members must be in favor of voluntary liquidation for the credit union to be voluntarily liquidated. Those casting ballots by mail or at the meeting constitute a quorum for the transaction of business at such special meeting, notwithstanding any contrary bylaw provision.

(4)  Upon adoption by the board of directors of a resolution recommending that the credit union be voluntarily liquidated, the corporation or the National Credit Union Administration, whichever is applicable, may restrict control or give directions with respect to the continued business of the credit union pending consideration of the voluntary liquidation by the members. During such period, no member shall withdraw an aggregate amount in excess of the insurance or guaranty covered by the credit union. No new extensions of credit shall be funded during the period between the board of directors' adoption of the resolution recommending the voluntary liquidation and the membership meeting called to consider the voluntary liquidation, except for loans fully secured by a pledge of shares and for the funding of outstanding loan commitments approved before the board of directors adopts the resolution.

(5)  The notice required by subsection (3) shall also be mailed to the department within 5 days after the action of the board of directors. Within 10 days after the meeting of the membership, the board of directors shall notify the department and the corporation or the National Credit Union Administration, whichever is applicable, in writing of the action taken by the members.

(6)  If the voluntary liquidation is approved by the membership, the board of directors shall appoint a liquidator to proceed with the liquidation. All reasonable and necessary expenses of operation during the period of liquidation shall continue to be paid as authorizable by the board of directors. When all assets from which there is a reasonable expectancy of realization have been fully paid, the remaining liquidation proceeds shall be paid and distributed to the members, ratably according to the balances in the share accounts as of the close of the last business day preceding the date of the resolution of the board of directors pursuant to subsection (2).

(7)  The corporation or the National Credit Union Administration, whichever is applicable, shall have the right of first refusal to be appointed as liquidator of any liquidating credit union which it guarantees or insures. The liquidator shall have all of the powers provided in s. 657.063 regarding involuntary liquidation. If the corporation or the National Credit Union Administration shall decline to serve as liquidator, the board of directors shall appoint a reasonable person as liquidator and specify the extent of responsibilities and authority delegated to the liquidator.

(8)  When the liquidating agent of the credit union has been appointed, the department may waive or hold inapplicable the fees required by this chapter and the examination required by s. 655.045(1)(a), provided the liquidating agent submits periodic reports to the department on the status of the liquidation.

(9)  Whenever the board of directors or liquidator determines that all assets from which there is a reasonable expectancy of realization have been liquidated and distributed to the members, a certificate of dissolution on forms prescribed by the department shall be prepared and filed with the department together with all pertinent books and records of the credit union, and thereupon the credit union shall be dissolved and its certificate of authorization canceled. The department may designate a custodian to maintain the books and records of the liquidated credit union.

History.--ss. 1, 6, ch. 80-258; s. 444, ch. 81-259; ss. 2, 3, ch. 81-318; ss. 11, 46, ch. 82-214; ss. 19, 58, ch. 85-82; s. 1, ch. 91-307; ss. 1, 99, ch. 92-303.

657.065  Merger.--

(1)  Any state or federal credit union may merge with another state or federal credit union under the existing certificate of authorization of the other credit union, pursuant to any plan agreed upon by the majority of the board of directors of each credit union joining in the merger, if:

(a)  The merger is approved by the affirmative vote of a majority of the members of the merging credit union who voted on the issue;

(b)  The merger is consented to by the corporation or the National Credit Union Administration, whichever is applicable; and

(c)  The merger is approved by the authority under the supervision of which the resulting credit union will operate.

(2)  The department shall approve a merger as provided in this section if it finds upon the written and verified application filed by each board of directors that:

(a)  Notice of intent to merge was given to the members of the surviving credit union;

(b)  Notice of the meeting called to consider the merger was given to the members entitled to vote upon the question;

(c)  Such notice disclosed the purpose of the meeting and properly informed the membership of the merging credit union that approval of a merger was under consideration;

(d)  A majority of the votes cast upon the question by the members of the merging credit union were in favor of the merger; and

(e)  The merger will not seriously impair the ongoing viability of the surviving credit union.

(3)  After agreement by the boards of directors and approval by the members of the merging credit union, the chief executive officer of the surviving credit union shall execute a plan of merger, which shall set forth all of the following:

(a)  The time and place of the meeting of each 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;

(f)  The name and the specific location of the proposed main office and each existing and proposed branch office;

(g)  The name of each director who is to serve until the next annual meeting; and

(h)  A copy of any proposed bylaw amendments.

(4)  The plan of merger shall be transmitted to the department for its approval.

(5)  A merger application shall be accompanied by a nonrefundable fee of $500. The fee may be waived by the department for a merger pursuant to subsection (6).

(6)  Notwithstanding any other provisions of this chapter or of chapter 120, a credit union may merge without a vote of the membership when the department determines that the credit union is in danger of insolvency and that the merger will enable the credit union to avoid liquidation.

(7)  A merger with a resulting state credit union may not take place or be effective unless the department issues a certificate of merger. Upon consummation of the merger, the certificate of authorization of the merged credit union shall be returned to the proper authority to be canceled. Also at consummation, all property and property rights of, and members' interests in, the merged credit union vest in the surviving credit union without deed, endorsement, or other instrument of transfer, and all debts, obligations, and liabilities of the merged credit union must be assumed by the surviving credit union under the certificate of authorization under which the merger was effected. All members of the surviving credit union have the same rights, privileges, and responsibilities after the merger is completed. The certificate of merger must be recorded in the public records of all counties in which the merging credit union owned any real property at the effective date of the merger.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 12, 46, ch. 82-214; ss. 18, 51, ch. 84-216; ss. 20, 58, ch. 85-82; s. 1, ch. 91-307; ss. 1, 100, ch. 92-303.

657.066  Conversion from state credit union to federal credit union and conversely.--Any credit union organized under this part may convert into a federal credit union and any federal credit union may convert into a credit union organized pursuant to this part upon approval of the authority under the supervision of which the converted credit union will operate and upon compliance with applicable laws.

(1)  Any action by the board of directors proposing conversion shall be by resolution and shall require the affirmative vote of an absolute majority of the board of directors. Upon adoption of a resolution relating to conversion, a copy of the resolution shall be mailed to each member, together with a notice setting forth the time, location, and purpose of a meeting of the membership which shall be held not less than 10 nor more than 30 days following the mailing of the notice.

(2)  A ballot allowing an affirmative or negative vote on the proposed conversion shall also be mailed to each member. Any ballot received by the credit union prior to the meeting called to consider the conversion shall be counted along with the votes cast at the meeting. Each member shall have but one vote. A majority of the votes cast by the members shall be required to approve the conversion.

(3)  Within 10 days after the approval of the membership, the board of directors shall cause to be transmitted to the authority under the supervision of which the converted credit union will operate a copy of the resolution adopted by the board of directors and approved by the membership.

(4)  Upon the written approval of the authority under the supervision of which the converting credit union is to operate, the converting credit union shall become a credit union under this chapter or under the laws of the United States, as the case may be, and thereupon all assets shall become the property of the converted credit union, subject to all existing liabilities against the credit union. All shares and deposits shall remain intact. Any federal credit union seeking to convert to a state-chartered credit union shall pay a nonrefundable filing fee of $500. The department may conduct an examination of any converting federal credit union before approving the conversion and the converting credit union shall pay a nonrefundable examination fee as provided in s. 655.411(1)(b).

(5)  Every conversion must be completed within 90 days after the approval of the authority under the supervision of which the converted credit union will operate. Upon receiving its certificate of authorization or charter from the authority under the supervision of which the converted credit union will operate, the old certificate of authorization or charter shall be returned to the proper authority and shall be canceled.

(6)  In consummation of the conversion, the old credit union may execute, acknowledge, and deliver to the newly chartered credit union the instruments of transfer necessary to accomplish the transfer of any property and all right, title, and interest therein.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 13, 46, ch. 82-214; s. 1, ch. 91-307; s. 1, ch. 92-303; s. 11, ch. 93-111.

657.067  Conversion from federal to state charter; requirements for application approval.--

(1)  The Department of Banking and Finance shall not approve an application by a federally chartered credit union currently doing business in this state for conversion to a state charter pursuant to s. 657.066, unless a completed application for conversion was on file with the department on February 25, 1998.

(2)  The prohibition specified in subsection (1) shall terminate on July 1, 1999, unless the Comptroller determines before such date by an order of general application that it is in the public interest to accept and approve charter conversion applications, and identifies a procedure for the acceptance and processing of such conversion applications. In making such determination, the Comptroller shall consider:

(a)  Whether the United States Congress has amended the Federal Credit Union Act, 12 U.S.C. s. 1751 et seq., subsequent to the enactment of this section, and, if so, the effect such amendments have or may have on the relative competitive positions of state-chartered and federally chartered credit unions.

(b)  Whether, and the extent to which, this state will be able to assume the costs of examination and supervision for any newly converted institutions.

(c)  Such other factors as the Comptroller deems relevant to the maintenance of a fair and competitive financial system in this state.

History.--s. 1, ch. 98-343.

657.068  Central credit unions.--

(1)  Any directors of seven credit unions organized pursuant to this chapter or organized pursuant to federal law and operating in this state may, with the authorization of their boards of directors, apply for a certificate to operate as a central credit union in the manner provided by s. 657.005 and shall operate as a credit union in accordance with this chapter. Such credit union shall use the name "central" in its name.

(2)  Membership in a central credit union shall be limited to:

(a)  Credit unions organized and operating under this part or any other credit union act;

(b)  Officers, directors, committee members, and employees of such credit unions, and officials and employees of any association of credit unions;

(c)  Organizations and associations of those persons or organizations set forth in paragraph (a) or paragraph (b);

(d)  Residents of this state having a limited field of membership who have applied to the department to organize a credit union and have been denied on grounds other than those set forth in s. 657.005(6);

(e)  Residents of this state having a limited field of membership, if their application for membership is approved by the board of directors of the central credit union and by the department;

(f)  Persons in the field of membership of liquidated credit unions or of credit unions which have entered into or are about to enter into voluntary or involuntary liquidation proceedings; and

(g)  Members of the immediate families of all members qualified above.

(3)  Each credit union or other organization becoming a member of a central credit union may designate one person to be its voting representative in any membership meeting. That person shall be designated by the board of directors of the member credit union or other organization. Such voting representatives shall be eligible to hold office in the central credit union as if such person were himself or herself a member of the central credit union.

(4)  A central credit union shall have all the powers of any credit union organized under this part and shall have the following powers, notwithstanding any limitations or restrictions herein:

(a)  A central credit union may make loans to other credit unions, purchase shares of and make deposits in other credit unions, and obtain or acquire the assets and liabilities of any credit union operating in this state which liquidates, provided such assets are otherwise eligible for investment by the acquiring credit union.

(b)  A central credit union may invest in and grant loans to associations of credit unions, central funds of credit unions, or organizations chartered to provide services to credit unions.

(5)  Nothing in this section shall operate to remove from membership any person who, or organization which, is presently a member of any central credit union.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 91-307; ss. 1, 101, ch. 92-303; s. 538, ch. 97-102.

657.25  Title.

657.251  Purposes.

657.252  Scope; construction.

657.253  Definitions.

657.254  Creation of the corporation.

657.256  Board of directors.

657.257  Guaranty certificates.

657.258  Powers and duties of the corporation; assessments; loss reserves.

657.259  Plan of operation.

657.260  Duties and powers of the department.

657.261  Effect of paid claims.

657.262  Detection and prevention of insolvencies.

657.263  Examination of the corporation; disposition of the corporation's records.

657.264  Immunity.

657.265  Stay of proceedings; reopening of default judgments.

657.266  Cooperation by liquidator and the corporation.

657.267  Advertising or displays.

657.268  Rules.

657.269  Dissolution of the corporation.

657.25  Title.--This part shall be known and may be cited as the "Florida Credit Union Guaranty Corporation Act."

History.--s. 1, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 1, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.251  Purposes.--The purposes of this part are to:

(1)  Provide a mechanism whereby the shares and deposits of any member of a member credit union shall be protected or guaranteed up to amounts which are established by the corporation and to avoid excessive delay in payment of such shares and deposits.

(2)  Avoid financial loss to members of credit unions because of the insolvency or liquidation of a member credit union.

(3)  Assist in the detection and prevention of credit union insolvencies or liquidations.

(4)  Provide for a corporation to administer, implement, and supervise the plan of operation provided for under this part.

(5)  Provide for the equitable apportionment among member credit unions and to assess the cost of such protection.

(6)  Provide for the orderly conversion of member credit unions to share insurance through the National Credit Union Administration, or the liquidation or merger of member credit unions, and the liquidation of the corporation.

History.--s. 2, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 2, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 1, 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.252  Scope; construction.--This act shall apply to all credit unions chartered and existing under the laws of this state, except as specifically exempted herein, and shall be liberally construed to accomplish the purposes set forth in s. 657.251, which shall constitute an aid and guide to interpretation.

History.--ss. 3, 4, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.253  Definitions.--As used in this part:

(1)  "Account" means any account of any member of a member credit union into which are deposited shares or deposits of that member.

(2)  "Corporation" means the Florida Credit Union Guaranty Corporation, Inc.

(3)  "Department" means the Department of Banking and Finance.

(4)  "Covered claim" means any unpaid shares or deposits of a member of a member credit union not in excess of the applicable amounts to which this act applies, as established by the plan of operation of the corporation, if such credit union becomes insolvent and goes into voluntary liquidation or is placed in involuntary liquidation by order of the department after January 1, 1975.

(5)  "Insolvent credit union" means a member credit union which has become insolvent and has gone into voluntary liquidation, or which has been placed in involuntary liquidation by order of the department. "Insolvent" means that all the assets of the credit union, if made immediately available or if made available within a reasonable time, would not be sufficient to discharge all the liabilities, shares, or deposits or that the credit union is unable to pay its debts as they become due in the ordinary course of business.

(6)  "Member credit union" means any credit union authorized and chartered under the laws of this state which has obtained and maintained membership with the corporation as of April 18, 1991.

(7)  "Shares and deposit capital" means the aggregate total of shares and deposits held by the member credit union as of December 31 of the preceding year.

History.--s. 5, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 3, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 21, 58, ch. 85-82; ss. 2, 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.254  Creation of the corporation.--The original enactment of this part as set forth in chapter 74-183, Laws of Florida, created a corporation to be known as the Florida Credit Union Guaranty Corporation, Inc. The corporation shall perform its functions under a plan of operation established and approved under this part and shall exercise its powers through a board of directors established under this part. Said corporation shall have all of those powers granted or permitted corporations for profit, as provided in chapter 607 and as provided under this act.

History.--s. 6, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 4, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.256  Board of directors.--

(1)  The board of directors of the corporation shall consist of not less than five or more than nine persons serving terms as established in the plan of operation. The number of persons comprising the board of directors shall be fixed by the board of directors as established in the plan of operation.

(2)  Vacancies created by expiration of a term of office shall be filled by annual election of the member credit unions. The election shall be in the manner provided by the plan of operation and may be by ballot at an annual meeting or by mail ballot. The annual meeting of the corporation shall be held each year at a time and place fixed by the board of directors in accordance with the plan of operation, and each term of office shall commence immediately following the annual meeting. Vacancies occurring during a term of office shall be filled for the remaining period of the term by election by a majority of the remaining directors.

(3)  In order to be eligible for appointment or selection to the board of directors and for continuing service as a director, a person must have served for at least 2 years as an officer or in a managerial position of a member credit union and must meet such other criteria and qualifications as established in the plan of operation.

(4)  Members of the board may be reimbursed from the assets of the corporation for reasonable and necessary expenses incurred by them as members of the board of directors, but no members of the board shall be compensated for their services.

(5)  All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the board of directors.

(6)  The board of directors may elect such officers as the board may determine to be necessary. Officers need not be members of the board.

History.--s. 8, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 5, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.257  Guaranty certificates.--

(1)  Every member credit union shall maintain a guaranty certificate issued by the corporation until the accounts of the credit union are insured through the National Credit Union Administration.

(2)  The guaranty certificate issued by the corporation shall evidence the undertaking by the corporation to guarantee accounts of member credit unions to the extent of covered claims subject to such terms and conditions as the board of directors may from time to time prescribe. Guaranty certificates may be regular or provisional.

(a)  Provisional guaranty certificates shall be issued for a period determined by the board of directors, but not less than 6 months nor more than 2 years. A provisional certificate may be renewed for an additional period not to exceed 12 months. There may be only one such renewal period.

(b)  A regular guaranty certificate shall be issued for a continuing and indefinite period.

(c)  The board of directors may cancel any certificate if the board of directors finds that there has been a deterioration since the issuance of the guaranty certificate in the financial condition, adequacy of reserves, application of financial and loan policies, or extent of delinquencies of the member credit union or if the department determines that the credit union is engaging in an unsafe or unsound practice, is violating any provision of chapter 655 or this chapter, or is violating any department rule, department order, or agreement entered into with the department. In the event of cancellation of a regular guaranty certificate, the corporation shall issue to such member credit union a provisional guaranty certificate unless, at the time of such cancellation, the credit union is insolvent and, in such event, the corporation may decline to issue a provisional guaranty certificate.

(3)  If, during the term of a provisional certificate, including any renewal thereof, the member credit union fails to qualify for share insurance through the National Credit Union Administration or a regular guarantee of its accounts and full membership in the corporation, the corporation will notify the department stating, with particularity, the deficiency which prevents the qualification for such share insurance through the National Credit Union Administration or issuance of the regular guaranty certificate, and, thereupon, the department shall institute proceedings to revoke the certificate of organization of such credit union.

(4)  Each member credit union shall surrender the guaranty certificate from the corporation in the following manner:

(a)  A member credit union directed by the department must file a complete application for federal share insurance through the National Credit Union Administration not later than 30 days after April 18, 1991. The department may direct the corporation to assume control or shall order involuntary liquidation of any member credit union that fails to file a complete application within the prescribed time.

(b)  A member credit union must obtain a certificate of insurance issued through the National Credit Union Administration within 42 months after April 18, 1991. The department may extend the period not to exceed 12 months if the department finds that the credit union is making substantial effort to satisfy the conditions precedent to issuance of the certificate of insurance and the credit union is likely to satisfy such conditions within the additional 12-month period. The department may order the involuntary liquidation or merger of any member credit union that fails to timely comply with the provisions of this paragraph.

(c)  A member credit union that receives a certificate of insurance through the National Credit Union Administration must file a copy of the certificate with the department and with the corporation within 10 days after receipt. Upon receipt of the certificate of insurance by the member credit union, the guaranty certificate from the corporation is canceled and neither the member credit union nor the members of the credit union shall have any further claim against the corporation except as otherwise provided in this part.

History.--s. 9, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 6, ch. 78-123; ss. 2, 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 22, 58, ch. 85-82; ss. 3, 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.258  Powers and duties of the corporation; assessments; loss reserves.--

(1)  The corporation shall, in addition to the powers and duties enumerated in other sections of this part:

(a)  Be obligated to the extent of the covered claims existing as of the date that a member credit union adopts a resolution of voluntary liquidation, or as of the date the department enters the order that a member credit union be placed in involuntary liquidation, but such obligation shall include only that amount of each covered claim which is not greater than the maximum amount established by the corporation, which maximum amount shall in no event be less than $40,000.

(b)  Be deemed the guarantor to the extent of its obligation on covered claims and, to such extent, shall have all of the rights, duties, and obligations of the insolvent credit union as if the credit union had not become insolvent.

(2)  The corporation may:

(a)  Employ or retain such persons as are necessary to handle claims and perform other duties of the corporation.

(b)  Borrow funds necessary to effect the purposes of this act in accordance with the plan of operation.

(c)  Sue or be sued.

(d)  Negotiate, and become a party to, such contracts as are necessary to carry out the purposes of this act.

(e)  Adopt, use, and display a corporate seal.

(f)  Advance funds, with or without interest, in accordance with agreed terms and conditions to aid member credit unions to continue to operate and to maintain solvency or to maintain account balances with a financial institution in connection with the assumption of receivables from a member credit union, or to provide liquidity for payment of shares and deposits following a determination of voluntary or involuntary liquidation.

(g)  Upon the written request of the department, assume control of the property, assets, and business of any member credit union and operate the credit union in accordance with the recommendations of the department. The corporation shall have all the powers, duties, and authorities of the board of directors of such credit union, specifically including the power and authority to elect or designate directors, officers, and committee members, who need not be members of the member credit union, to sell assets, and to terminate and employ personnel for the credit union.

(h)  Assist in the merger, consolidation, or liquidation of credit unions with written notice to the department. In the event of liquidation of a member credit union that has not received a certificate of insurance through the National Credit Union Administration, whether voluntary or involuntary, the corporation must be designated as the liquidating agent and, as such, the corporation shall have all the duties, powers, and authorities of the board of directors of such liquidating credit union, specifically including, but not limited to, the power and authority to elect and designate directors, officers, and committee members, who need not be members of the credit union; to sell assets; and to terminate and employ personnel for the liquidating credit union. The corporation shall have the right and authority to participate in negotiations for any contemplated merger, consolidation, or liquidation of a member credit union and to approve the terms of any sales of assets in order to minimize potential loss which might result in a covered claim to be paid by the corporation.

(i)  Receive money or other property from its member credit union or from any corporation, association, or person.

(j)  Invest its funds in bonds, notes, securities, obligations, participations, or other instruments of, issued by, or fully guaranteed as to principal and interest by, the United States Government or any agencies thereof, or in any trust or trusts established for investing directly or collectively in the same, and in such other investments, other than investments in credit unions which are members of the corporation, as are deemed prudent by the directors, but these other investments shall not exceed 25 percent of the funds of the corporation.

(k)  Purchase in its own name, hold, and convey property of any nature.

(l)  Receive by assignment or purchase from its member credit unions any property of any nature owned by those member credit unions, including securities.

(m)  Sell, assign, mortgage, encumber, or transfer property of any nature.

(n)  Adopt and amend a plan of operation and bylaws for carrying out the purposes of this part.

(o)  Purchase or acquire by assignment loans due and owing to credit unions, along with the right to receive payments thereon.

(p)  Pay dividends to member credit unions.

(q)  Have access to and make audit or examination of all records and information concerning the affairs of a member credit union.

(r)  Pledge or advance funds, or enter into agreements with the National Credit Union Administration, notwithstanding any other provisions of this part, and may otherwise provide assistance to enable member credit unions to qualify for a certificate of insurance through the National Credit Union Administration, if the action would not preclude the corporation from meeting its current and future obligations under this part.

(3)  To obtain funds for the fulfillment of the purposes of the corporation, for the provision of reserves for the protection of potential claimants, and for the payment of costs of operating the corporation, the corporation shall be authorized and empowered to levy and collect from member credit unions fees and assessments as follows:

(a)  The corporation shall levy and collect from each member credit union that has not received a certificate of insurance through the National Credit Union Administration an annual growth fee in an amount equal to 0.5 percent of the annual increase in its guaranteed shares and deposits as determined as of December 31 of each year.

(b)  In addition to the fees set forth above, the corporation may levy and collect a uniform annual assessment from each member credit union that has not received a certificate of insurance through the National Credit Union Administration in an amount to be determined by the board of directors not to exceed 0.05 percent of its guaranteed shares and deposits determined as of December 31 of the preceding year.

(c)  In addition to the fees and annual assessment, the corporation, in the event of potential impairment of the corporation's capital assets, may levy and collect from the member credit unions uniform special assessments in amounts to be determined by the board of directors, subject to approval by the department. If the board of directors determines that a special assessment is necessary, then such determination shall be submitted in writing to the department, and the special assessment shall be approved, modified, or disapproved within 60 days after it is received by the department.

(d)  The initial membership fee and the growth membership fee shall be considered as an investment of the member credit union in the corporation. Such investment shall not be transferable except to another member credit union as a result of a merger approved by the department; and, in such event, the amount of such investment which may be transferred to the acquiring credit union shall not exceed 0.5 percent of the guaranteed shares and deposits of the acquired member credit union as of the preceding December 31 or the date of merger, whichever amount is the lower.

(e)  Annual and special assessments hereunder shall be considered as a payment by the member credit union into the loss reserve to be maintained by the corporation. Each payment by member credit unions after 1983 shall be retained by the corporation as a permanent part of its working capital and the funds received by the corporation shall be restricted to use as part of the loss reserve. The interest of each member credit union in the balance of the loss reserve shall be proportionate according to the amount paid in by all member credit unions which are members of the corporation on April 18, 1991. Such interest in the loss reserve shall not be transferable, except to another member credit union as a result of a merger approved by the department and shall be applied in the calculation of any amount of any refund to be made to each member credit union under s. 657.269.

(f)  The total amount paid in by each member credit union as its investment in the corporation and the amount paid into the loss reserve must be determined as of April 18, 1991. The interest of each member credit union in the corporation must be proportionate according to the total amount paid in by all member credit unions as of April 18, 1991. The proportion thus determined must be applied in the calculation of the amount of any refund to be made to each member credit union under s. 657.269.

(g)  All fees and assessments shall be paid in the manner established by the plan of operation.

(h)  In the event the assets of the corporation fall below 0.5 percent of the total aggregate guaranteed shares and deposits of all member credit unions which have not received certificates of insurance through the National Credit Union Administration, the corporation may determine the proportionate amount of the reduction of the investment of each member credit union, and this amount shall be transferred from membership fees to the loss reserve and shall be considered as the payment of a special assessment by each member credit union.

(i)  Upon written application, the corporation, for good cause shown, may exempt or defer any member credit union from an assessment if such assessment would result in such credit union being forced into insolvency, liquidation, or an unsound financial condition.

(j)  No state funds of any kind shall be allocated or paid to the corporation.

(4)  The corporation shall, upon proper verification, as provided by the plan of operation, reimburse a member credit union for necessary and proper expenses incurred by the member credit union in the investigation, adjustment, compromise, settlement, denial, or handling of covered claims at the request of the corporation.

(5)  The corporation shall maintain a loss reserve to provide assurances that funds will be available for potential claimants and for the fulfillment of the purposes of the corporation.

(a)  There shall be credited to the loss reserve:

1.  Payments by member credit unions of annual and special assessments.

2.  Amounts transferred from the membership fees account to the loss reserve.

3.  Amounts invested by members which are not refundable upon withdrawal of such members.

4.  Annual net income of the corporation for each year, unless at the end of the year the balance of the loss reserve is greater than 1 percent of the aggregate of all guaranteed shares and deposits of all then-member credit unions.

5.  Recoveries of the amounts previously charged against the loss reserve.

(b)  There shall be charged against the loss reserve:

1.  Amounts paid as covered claims in excess of current net income and accumulated retained earnings.

2.  Advances to member credit unions which are determined to be uncollectible and which exceed current net income.

3.  Refunds to withdrawing members of interest in the loss reserve.

4.  Annual net loss of the corporation for each year in excess of the accumulated retained earnings from prior years.

History.--s. 10, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-174; s. 1, ch. 77-457; s. 7, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 84-74; ss. 19, 51, ch. 84-216; ss. 23, 58, ch. 85-82; ss. 4, 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.259  Plan of operation.--

(1)  The corporation shall establish the plan of operation to assure the fair, reasonable, expeditious, and equitable administration of the corporation. The plan of operation, and any amendments thereto, shall be approved by the board of directors and submitted to the department. The plan of operation, and any amendments thereto, shall become effective upon approval in writing by the department, which shall approve or disapprove any proposal within 60 days after the proposal is received by the department.

(2)  All member credit unions shall comply with the plan of operation, amendments thereto, and any rules adopted by the department under this part.

(3)  The plan of operation shall:

(a)  Require that every member credit union authorized by certificate of organization by the department, excepting only those whose accounts are insured through the National Credit Union Administration, shall maintain membership in the corporation. Failure to meet the standards and qualifications of full membership within the terms of a provisional guaranty certificate shall constitute a ground for revocation of the certificate of organization by the department.

(b)  Establish the procedure whereby all of the powers and duties of the corporation will be performed.

(c)  Establish the procedures for handling assets of the corporation.

(d)  Establish the amount and method of reimbursing members of the board of directors for reasonable and necessary expenses incurred by them as members of the board of directors.

(e)  Establish procedures by which claims against insolvent credit unions, which are required to be filed with the receiver or liquidator, are to be referred to the corporation. No claim shall be filed with the corporation unless the same is properly filed with the liquidator. The liquidator shall periodically submit a list of all claims filed to the corporation for its consideration, approval, and payment.

(f)  Establish the terms of office of members of the board of directors and the places and times for meetings of the board.

(g)  Establish procedures for records to be kept of all financial transactions of the corporation and its agents and the board of directors.

(h)  Contain any additional provisions necessary or proper for the execution of the powers, functions, and duties of the corporation consistent with this part.

(i)  Provide for the dissolution of the corporation to include procedures for the payment of liquidating dividends to member credit unions as provided in s. 657.269.

History.--s. 11, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 7, ch. 78-95; s. 8, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 24, 58, ch. 85-82; ss. 5, 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.260  Duties and powers of the department.--

(1)  The department shall:

(a)  Notify the corporation not later than 3 days after the taking of action or the finding by the department that a member credit union is bankrupt or insolvent, or of the filing of a complaint against a member credit union or of the issuance of a cease and desist order against a member credit union, or of an order placing a member credit union in involuntary liquidation.

(b)  Promptly notify the corporation of the existence of any material deviation from accepted and established practices, policies, and rules which may have an adverse effect on the financial condition of a member credit union.

(c)  Designate and appoint the corporation as liquidating agent for any member credit union.

(d)  Upon the request of the board of directors, provide the corporation, at not more than cost and at the corporation's expense, a copy of the most recent examination report by the department of each member credit union.

(2)  The department may:

(a)  Require that the corporation notify the individual members of the liquidating member credit union and any other interested parties of the determination of liquidation and of their rights and duties under this act. Such notification shall be by mail to their last known address, when available, but if sufficient information for notification by mail is not available, notice by publication at least one time in a newspaper of general circulation shall be sufficient.

(b)  Suspend or revoke the certificate of organization or authority to transact business as a credit union in this state of any member credit union as defined by this act which fails:

1.  To maintain membership in the corporation without prior approval of the department.

2.  To pay an assessment when due.

3.  Otherwise to comply with the plan of operation, with any rules promulgated by the department hereunder, or with this part.

As an alternative to suspension or revocation, the department may levy a delinquency charge on any member credit union which fails to pay an assessment when due. Such charge shall not exceed 5 percent of the unpaid assessment per month, except that no charge shall be less than $100 per month. All such delinquent charges levied and collected shall be deposited in the bank and trust company trust funds of the department.

(c)  Revoke, terminate, or cancel the designation of any service or claims facility being utilized by the corporation, or of any liquidating agent or receiver, if it finds claims are being handled unsatisfactorily.

(d)  Order the corporation to take any action required to be taken by the corporation under this part.

History.--s. 12, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-117; s. 1, ch. 77-457; s. 7, ch. 78-95; s. 9, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 25, 58, ch. 85-82; ss. 6, 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.261  Effect of paid claims.--

(1)  Any claimant recovering under this part shall be deemed to have assigned all of his or her rights or interest in his or her shares or deposits with the insolvent member credit union to the corporation, to the extent of the claimant's recovery from the corporation. Every claimant seeking the protection of this act shall fully cooperate with the corporation and the receiver or liquidator to the same extent as such person would have been required to cooperate with the insolvent credit union. The corporation shall have the same cause of action as the insolvent credit union would have had if such sums had been paid by the insolvent credit union.

(2)  The receiver, liquidator, or statutory successor of an insolvent credit union shall be bound by settlements of covered claims paid by the corporation. The court, department, or liquidator having jurisdiction shall grant such claims a priority equal to that, and in an amount, to which the claimant would have been entitled in the absence of this act against the assets of the insolvent credit union. The administrative expenses of the corporation in handling claims shall be accorded the same priority as the liquidator's administrative expenses. Such administrative expenses of the corporation and of the liquidator shall be accorded first priority in the settlement of all claims against any credit union which goes into voluntary liquidation or which is placed in involuntary liquidation by order of the department.

(3)  The corporation shall periodically file with the receiver or liquidator of the insolvent credit union statements of all of the covered claims paid by the corporation, along with estimates of anticipated claims on the corporation, which shall preserve the rights of the corporation against the assets of the insolvent credit union.

History.--s. 13, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 10, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429; s. 539, ch. 97-102.

657.262  Detection and prevention of insolvencies.--To aid in the detection and prevention of credit union insolvencies or liquidations:

(1)  It shall be the duty of the board of directors of the corporation to promptly notify the department of any information it has indicating that any member credit union may be insolvent or in an unsound financial condition that might jeopardize the safety of shares and deposits of the members or potential members of the credit union.

(2)  The board of directors may request that the department order an examination of any member credit union which the board in good faith believes may be in an unsound financial condition that might jeopardize the safety of the shares and deposits in the credit union. Within a reasonable time after receipt of such request, the department shall commence such examination. The department may charge the actual cost of such examination, which shall be paid by the corporation to the department, and the examination report shall be treated as are other examination reports under part I. The department shall notify the corporation when the examination is completed in writing and forthwith furnish the corporation with a copy of the report.

(3)  It shall be the duty of the department to report immediately in writing to the corporation when it has reasonable cause to believe that any member credit union examined, or which is being examined at the request of the corporation, may be insolvent or in an unsound financial condition.

(4)  The corporation may make reports and recommendations to the department upon any matter which is relevant to the solvency, liquidation, rehabilitation, or conservation of any member credit union. In order to protect the integrity and financial reputation of the credit union involved and the privacy of the members of that credit union, such reports and recommendations under subsection (3) and this subsection shall not be considered to be public records or documents.

(5)  The corporation may make recommendations to the department for the detection and prevention of member credit union insolvencies or to enhance the financial soundness of member credit unions.

(6)  The corporation shall, within 6 months after the conclusion of any credit union liquidation proceedings in which the corporation was obligated to pay covered claims, prepare a report of the history and the causes of such insolvency, based on the information available to the corporation. Such report shall be submitted to the department.

History.--s. 14, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 11, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 7, 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.263  Examination of the corporation; disposition of the corporation's records.--

(1)  The books, records, and accounts of the corporation shall be subject to an examination at least annually by the department. The department may charge the actual cost of the examination. The corporation shall submit, not later than January 31 of each year, a financial report for the preceding calendar year in a format approved by the department. Such report shall be prepared in accordance with generally acceptable accounting practices.

(2)  The department is entitled to possess all books, records, and accounts of the corporation upon its dissolution. The department may request the transfer of any books, records, or accounts that are not required by the corporation for current operations. Upon dissolution of the corporation, all the remaining books, records, and accounts of the corporation must be delivered to the department for preservation or ultimate disposition pursuant to law.

History.--s. 15, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 12, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 8, 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.264  Immunity.--There shall be no liability for damages on the part of, and no cause of action in tort of any nature shall arise against:

(1)  Any member credit union;

(2)  The corporation or its agents, employees, or board of directors; or

(3)  The department or any of its representatives or employees;

for any action taken by any of them in the performance of its powers and duties under this act, unless such action is willful, wanton, or fraudulent.

History.--s. 16, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.265  Stay of proceedings; reopening of default judgments.--All proceedings in which an insolvent member credit union may be a party in any court in this state shall be stayed for 60 days from the date the insolvency is determined by order of the department, by the board of directors in a voluntary liquidation, or by a court, in order to permit any proper defenses by the corporation to all pending causes of action with respect to any covered claims arising against such credit union. In the event of a finding by any such court based on the default of the member credit union, the corporation, either on its own behalf or on behalf of such member credit union, may apply to the court to have any such judgment, order, decision, verdict, or finding set aside and shall be permitted to defend promptly against such claim on the merits.

History.--s. 17, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 13, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.266  Cooperation by liquidator and the corporation.--Any order of liquidation issued by the department or any directive issued by the board of directors of a member credit union under voluntary liquidation under part I shall authorize and direct the receiver or liquidator to coordinate the operation of liquidation proceedings with the operation of the guaranty fund corporation created by this act. Such cooperation shall include, but not be limited to, access to, and the furnishing of, necessary copies of all claims files, records, or documents pertaining to claims on file with the liquidator. The guaranty fund corporation shall also coordinate the operation of its handling and payment of covered claims with said receiver or liquidator.

History.--s. 18, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.267  Advertising or displays.--Every credit union which has its shares and deposits protected by the corporation shall display at each place of business maintained by it a sign or signs indicating that its member accounts are protected by the corporation and shall include in all of its advertisements a statement to the effect that its member accounts are protected by the guaranty corporation. The corporation may exempt from this requirement advertisements which do not relate to member accounts or advertisements in which it is impractical to include such a statement.

History.--s. 19, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 14, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.268  Rules.--The department may promulgate any reasonable rules for the purpose of carrying out the intent and purposes of this part.

History.--s. 20, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 15, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.

657.269  Dissolution of the corporation.--

(1)  The corporation shall liquidate its assets, complete its business activities, and make final distribution to the member credit unions not later than the date the corporation converted its assets into cash and paid its liabilities or 6 months after the date all member credit unions received certificates of insurance through the National Credit Union Administration or were liquidated or merged, whichever last occurs.

(2)  The liquid assets of the corporation remaining after making provision for all amounts required to be paid or reserved to meet conditions of a liquidation, a merger, or the issuance of certificates of insurance through the National Credit Union Administration of member credit unions, and setting aside an adequate reserve to fully pay all future covered claims, losses, liabilities, and guarantees, and a provision for expenses of liquidation and dissolution of the corporation, all as determined by the corporation, with the approval of the department, shall be available for distribution to member credit unions proportionately according to the interest in the corporation of each member credit union.

(3)  Any amount paid or committed to assist in the merger or liquidation of a member credit union or in the qualification of a member credit union for a certificate of insurance through the National Credit Union Administration must be taken into account and shall reduce the amount otherwise distributable to that member credit union or its successor. Any member credit union that is liquidated is ineligible for any portion of a liquidating dividend that is paid subsequent to liquidation of that member credit union.

(4)  When all member credit unions have been liquidated, merged, or received certificates of insurance through the National Credit Union Administration or the financial impact on the corporation from satisfying any conditions of a liquidation, merger, or receipt of a certificate of insurance has been determined with reasonable certainty, the corporation shall begin making partial liquidating distributions. After the initial partial liquidating distribution, supplemental partial liquidating distributions must be made to member credit unions from time to time as funds are available. Determination of the amount available for distribution must be made at least once during each 12-month period and must be paid within 30 days after the determination.

(5)  Within 6 months after making final distribution to member credit unions, the corporation shall prepare and file with the department a final report and, pursuant to s. 657.263(2), shall turn over to the department all remaining books, records, and accounts of the corporation and of liquidated member credit unions which are in the possession of the corporation.

History.--ss. 9, 12, ch. 91-17; s. 4, ch. 91-429.