HB 1733

1	A bill to be entitled
2	An act relating to financial institutions and
3	transactions; amending s. 655.005, F.S.; revising
4	definitions; creating s. 655.0201, F.S.; providing
5	requirements and procedures for service of process,
6	notice, or demand on financial institutions; amending s.
7	655.044, F.S.; establishing the fiscal year end for
8	financial institutions; amending s. 655.057, F.S.;
9	removing references to the Florida Credit Union Guaranty
10	Corporation, Inc.; amending s. 655.411, F.S.; correcting a
11	cross reference; creating s. 655.4185, F.S.; authorizing
12	the Office of Insurance Regulation to issue certain
13	emergency orders authorizing certain actions that may be
14	taken against a failing financial entity; specifying
15	findings necessary for such orders; authorizing the office
16	to take certain enforcement actions; protecting
17	stockholder procedural rights and compensation
18	entitlements; amending s. 657.002, F.S.; revising
19	definitions; amending s. 657.005, F.S.; revising
20	application procedures for authority to organize a credit
21	union; amending s. 657.0061, F.S.; providing an additional
22	ground for disapproval of a bylaw amendment; amending s.
23	657.008, F.S.; revising provisions relating to principal
24	place of doing business; revising notification dates and
25	conditions for maintaining branches; requiring deposits of
26	a foreign credit union to be insured by the National
27	Credit Union Administration; amending s. 657.021, F.S.;
28	revising provisions relating to a credit union's board of
29	directors; clarifying terms of board of directors members;
30	requiring a board of directors to manage a credit union in
31	a safe and sound manner; revising requirements and
32	authority of a board of directors; requiring officer and
33	director liability insurance and bond coverage;
34	authorizing delegation of certain functions; requiring
35	that policies on operations of a credit union accord with
36	commission rules; amending s. 657.022, F.S.; modifying the
37	time period for the annual meeting of the board of
38	directors; amending s. 657.023, F.S.; revising a credit
39	union's authority to close accounts and terminate
40	membership; amending s. 657.024, F.S.; revising procedures
41	for distribution of ballots; amending s. 657.026, F.S.;
42	deleting reference to the Florida Credit Union Guaranty
43	Corporation, Inc.; clarifying notification required to
44	board of directors and the office of any unsafe or unsound
45	practice; amending s. 657.027, F.S.; clarifying the
46	authority of a credit manager; amending s. 657.028, F.S.;
47	clarifying which persons may not be compensated for
48	service; revising the prohibition on persons who may not
49	serve as officer, director, or committee member; amending
50	s. 657.031, F.S.; specifying the powers of a credit union;
51	prohibiting challenges to the validity of certain actions
52	of a credit union under certain circumstances; authorizing
53	the Financial Services Commission to adopt rules; amending
54	s. 657.033, F.S.; revising criteria for dormant accounts;
55	revising a time period for characterizing a dormant
56	account as unclaimed or abandoned property; specifying
57	what shares and deposits may be received by a credit
58	union; authorizing credit unions to participate in
59	electronic fund transfer, withdrawal, and deposit systems;
60	requiring a credit union to maintain account insurance;
61	amending s. 657.038, F.S.; revising limitations on total
62	unsecured obligations; providing an exception; revising
63	loan and credit authority of a credit union; authorizing a
64	credit union to issue credit cards and debit cards for
65	certain purposes; authorizing the commission to allow by
66	rule for the use of devices similar to credit card and
67	debit cards; amending s. 657.039, F.S.; revising a credit
68	union's authority to extend credit to its directors;
69	revising credit limitations; amending s. 657.042, F.S.;
70	amending the investment authority of a credit union;
71	revising limitations; amending s. 657.043, F.S.; revising
72	requirements for regular reserves, loan losses accounts,
73	investment losses, and special reserves; authorizing a
74	credit union to borrow money and issue evidence of
75	indebtedness; providing limitations; deleting provisions
76	relating to transfers to regular reserve, risk assets,
77	reserve for contingencies, equity to asset ratio
78	requirements, and guaranty assistance agreements; amending
79	s. 657.062, F.S.; providing requirements for appointment
80	of the National Credit Union Administration as conservator
81	of a credit union under certain circumstances; providing
82	criteria; amending s. 657.063, F.S.; revising requirements
83	for the involuntarily liquidation of a credit union;
84	authorizing the commission to define by rule criteria for
85	determining the adequacy of capitalization of a credit
86	union; amending s. 657.064, F.S.; revising requirements
87	and criteria for voluntary liquidation of a credit union;
88	removing references to the Florida Credit Union Guaranty
89	Corporation; amending s. 657.065, F.S.; revising
90	requirements, procedures, criteria, and limitations for
91	the merger of credit unions; providing requirements for
92	merger plans and agreements; providing authority and
93	requirements for the office to approve merger applications
94	and merger plans and agreements; providing for revocation
95	and termination of merger plans and agreements under
96	certain circumstances; providing for mergers without a
97	vote of membership under certain circumstances; requiring
98	approval of a merger by the National Credit Union
99	Administration and issuance by the office of a certificate
100	of merger; specifying consequences of mergers; preserving
101	rights of members; amending s. 657.066, F.S.; revising
102	requirements for conversion of a credit union from state
103	to federal and conversely; amending s. 658.43, F.S., to
104	conform; repealing s. 657.0315, F.S., relating to
105	contracts for providing goods, products, or services;
106	repealing s. 657.051, F.S., relating to the fiscal year of
107	a credit union; repealing s. 657.055, F.S., relating to
108	retention and destruction of records; repealing s.
109	657.068, F.S., relating to central credit unions;
110	providing an effective date.
111
112	Be It Enacted by the Legislature of the State of Florida:
113
114	Section 1.  Paragraphs (k) and (l) of subsection (1) of
115	section 655.005, Florida Statutes, are amended to read:
116	655.005  Definitions.--
117	(1)  As used in the financial institutions codes, unless
118	the context otherwise requires, the term:
119	(k)  "Imminently insolvent" means a condition in which a
120	financial institution has total capital accounts, or equity less
121	the allowance for loan losses in the case of a credit union, of
122	less than 2 percent of its total assets, after adjustment for
123	apparent losses.
124	(l)  "Insolvent" means a condition in which:
125	1.  The capital accounts, or equity less the allowance for
126	loan losses in the case of a credit union, and all assets of a
127	financial institution are insufficient to meet liabilities;
128	2.  The financial institution is unable to meet current
129	obligations as they mature, even though assets may exceed
130	liabilities; or
131	3.  The capital accounts, or equity less the allowance for
132	loan losses in the case of a credit union, of a financial
133	institution are exhausted by losses and no immediate prospect of
134	replacement exists.
135	Section 2.  Section 655.0201, Florida Statutes, is created
136	to read:
137	655.0201  Service of process, notice, or demand on
138	financial institutions.--
139	(1)  Process against any financial institution authorized
140	by federal or state law to transact business in this state may
141	be served in accordance with chapter 48, chapter 49, chapter
142	607, or chapter 608, as appropriate.
143	(2)  Any financial institution authorized by federal or
144	state law to transact business in this state may designate a
145	registered agent as the financial institution's agent for
146	service of process, notice, or demand required or permitted by
147	law to be served on the financial institution. If the financial
148	institution has no registered agent, or its registered agent
149	cannot with reasonable diligence be served, service may be made
150	on any executive officer of the financial institution at its
151	principal place of business in this state.
152	(3)  If service cannot be made in accordance with
153	subsection (2), service may be made on any officer, director, or
154	business agent of the financial institution at either its
155	principal place of business or any other branch, office, or
156	place of business in this state.
157	(4)  This section does not prescribe the only means, or
158	necessarily the required means, of serving notice or demand on a
159	financial institution.
160	Section 3.  Subsection (5) is added to section 655.044,
161	Florida Statutes, to read:
162	655.044  Accounting practices; bad debts ineligible to be
163	carried as assets.--
164	(5)  The fiscal year of a financial institution shall end
165	December 31.
166	Section 4.  Subsections (3) and (7) of section 655.057,
167	Florida Statutes, are amended to read:
168	655.057  Records; limited restrictions upon public
169	access.--
170	(3)  The provisions of this section do not prevent or
171	restrict:
172	(a)  Publishing reports required to be submitted to the
173	office pursuant to s. 655.045(2)(a) or required by applicable
174	federal statutes or regulations to be published.
175	(b)  Furnishing records or information to any other state,
176	federal, or foreign agency responsible for the regulation or
177	supervision of financial institutions, including Federal Home
178	Loan Banks.
179	(c)  Furnishing records or information, in the case of a
180	credit union, to the Florida Credit Union Guaranty Corporation,
181	Inc.
182	(c)(d)  Disclosing or publishing summaries of the condition
183	of financial institutions and general economic and similar
184	statistics and data, provided that the identity of a particular
185	financial institution is not disclosed.
186	(d)(e)  Reporting any suspected criminal activity, with
187	supporting documents and information, to appropriate law
188	enforcement and prosecutorial agencies.
189	(e)(f)  Furnishing information upon request to the Chief
190	Financial Officer or the Division of Treasury of the Department
191	of Financial Services regarding the financial condition of any
192	financial institution that is, or has applied to be, designated
193	as a qualified public depository pursuant to chapter 280.
194
195	Any confidential information or records obtained from the office
196	pursuant to this subsection shall be maintained as confidential
197	and exempt from the provisions of s. 119.07(1).
198	(7)  Materials supplied to the office or to employees of
199	any financial institution by other governmental agencies,
200	federal or state, or the Florida Credit Union Guaranty
201	Corporation, Inc., shall remain the property of the submitting
202	agency or the corporation, and any document request must be made
203	to the appropriate agency. Any confidential documents supplied
204	to the office or to employees of any financial institution by
205	other governmental agencies, federal or state, or by the Florida
206	Credit Union Guaranty Corporation, Inc., shall be confidential
207	and exempt from the provisions of s. 119.07(1). Such information
208	shall be made public only with the consent of such agency or the
209	corporation.
210	Section 5.  Paragraph (b) of subsection (1) of section
211	655.411, Florida Statutes, is amended to read:
212	655.411  Conversion of charter.--
213	(1)  Any financial entity may apply to the office for
214	permission to convert its charter without a change of business
215	form or convert its charter in order to do business as another
216	type of financial entity in accordance with the following
217	procedures:
218	(b)  Following approval by the board of directors, the
219	conversion plan, together with a certified copy of the
220	authorizing resolution adopted by the board, must be submitted
221	to the office for approval before being submitted to the members
222	or stockholders of the financial entity. The application for
223	conversion must be in the form prescribed by the commission,
224	contain such additional information as the commission or office
225	reasonably requires, and be accompanied by a filing fee in
226	accordance with s. 657.066(3)(4) or s. 658.73. Additionally, the
227	office is authorized to assess any financial entity, applying to
228	convert pursuant to this section, a nonrefundable examination
229	fee to cover the actual costs of any examination required as a
230	part of the application process.
231	Section 6.  Section 655.4185, Florida Statutes, is created
232	to read:
233	655.4185  Emergency action.--
234	(1)  Notwithstanding any other provisions of the financial
235	institutions codes or of chapter 120, if the office or the
236	appropriate federal regulatory agency finds that immediate
237	action is necessary in order to prevent the probable failure of
238	one or more financial institutions, which in this subsection may
239	be referred to as a "failing financial entity," the office may,
240	with the concurrence of the appropriate federal regulatory
241	agency in the case of any financial institution the deposits of
242	which are insured by the Federal Deposit Insurance Corporation
243	or the National Credit Union Administration, issue an emergency
244	order authorizing:
245	(a)  The merger of any such failing financial entity with
246	an appropriate state financial entity;
247	(b)  An appropriate state financial entity to acquire the
248	assets and assume the liabilities of any such failing financial
249	entity, including all rights, powers, and responsibilities as
250	fiduciary in instances in which the failing financial
251	institution is actively engaged in the exercise of trust powers;
252	(c)  The conversion of any such failing financial entity
253	into a state financial entity; or
254	(d)  The chartering of a new state financial entity to
255	acquire the assets and assume the liabilities of any such
256	failing financial entity and to assume rights, powers, and
257	responsibilities as fiduciary in cases in which such failing
258	financial entity is engaged in the exercise of trust powers.
259	(2)  Any such finding by the office shall be based upon
260	reports furnished to the office by a state or federal financial
261	institution examiner or upon other evidence from which it is
262	reasonable to conclude that any such financial institution is
263	insolvent or is threatened with imminent insolvency. The office
264	may disallow illegally obtained currency, monetary instruments,
265	funds, or other financial resources from the capitalization
266	requirements of the financial institution codes. The
267	stockholders of a failing bank, association, or trust company
268	that is acquired by another bank or trust company pursuant to
269	this section shall be entitled to the same procedural rights and
270	to compensation for the remaining value of their shares as is
271	provided for dissenters in s. 658.44, except that they shall
272	have no right to vote against the transaction. Any transaction
273	authorized by this section may be accomplished through the
274	organization of a successor institution.
275	Section 7.  Section 657.002, Florida Statutes, is amended
276	to read:
277	657.002  Definitions.--As used in this chapter:
278	(1)  "Capital" means shares, deposits, and equity.
279	(2)  "Central credit union" means a credit union the
280	membership of which includes, but is not limited to, other
281	credit unions, members of credit unions, credit union employees,
282	employees of organizations serving credit unions, and the
283	families of such members.
284	(2)(3)  "Corporate credit union" means any central credit
285	union organized pursuant to any state or federal act for the
286	purpose of serving other credit unions.
287	(4)  "The corporation" means the Florida Credit Union
288	Guaranty Corporation, Inc.
289	(3)(5)  "Correspondent" means that person designated on an
290	application to organize a credit union as the person to whom all
291	correspondence regarding the application should be sent.
292	(4)(6)  "Credit union" means any cooperative society
293	organized pursuant to this chapter.
294	(5)(7)  "Deposits" means that portion of the money placed
295	capital paid into the credit union by members on which a
296	contractual rate of interest may will be paid.
297	(6)(8)  "Equity" means undivided earnings, regular
298	reserves, and other reserves allowance for loan losses.
299	(7)(9)  "Foreign credit union" means a credit union
300	organized and operating under the laws of another state.
301	(8)(10)  "Immediate family" means parents, children,
302	spouse, or surviving spouse of the member, or any other relative
303	by blood, marriage, or adoption.
304	(9)(11)  "Limited field of membership" means the defined
305	group of persons designated as eligible for membership in the
306	credit union who:
307	(a)  Have a similar profession, occupation, or formal
308	association with an identifiable purpose; or
309	(b)  Live or work Reside within an identifiable
310	neighborhood, community, rural district, or county; or
311	(c)  Are employed by a common employer; or
312	(d)  Are employed by the credit union; and
313
314	members of the immediate family of persons within such group.
315	(10)(12)  "Shares" means that portion of the money capital
316	paid into the credit union by members on which dividends may be
317	paid.
318	(13)  "Unimpaired capital" means capital which is not
319	impaired by losses that exceed applicable reserves.
320	Section 8.  Subsection (1), paragraphs (a) and (d) of
321	subsection (3), paragraph (b) of subsection (5), and subsections
322	(9) and (10) of section 657.005, Florida Statutes, are amended
323	to read:
324	657.005  Application for authority Notice of intent to
325	organize a credit union; investigation; application for
326	authority to organize a credit union.--
327	(1)  The proposed organizers of the proposed credit union
328	shall file with the office an application a notice of intent to
329	organize, upon such form as the commission may, by rule,
330	prescribe.
331	(3)  The application shall be submitted to the office on
332	forms and in the manner prescribed by rules adopted by the
333	commission and shall be accompanied by a nonrefundable filing
334	fee of $250. Such application shall include:
335	(a)  The proposed name and the proposed location where the
336	proposed credit union is to have its principal place of business
337	and where legal service must be served.
338	(d)  Any information required by the commission or office
339	to be submitted to the National Credit Union Administration
340	corporation or insuring agency.
341	(5)  The application shall be approved if the office
342	determines that:
343	(b)  The qualifications of the proposed board of directors
344	and committee members are such as to indicate a reasonable
345	likelihood that the affairs of the proposed credit union will be
346	administered consistently with applicable laws and sound
347	financial and credit union practices;
348	(9)  The office shall perform a preopening examination to
349	verify good faith compliance with all the requirements of law.
350	If the office finds that such requirements have been met, it
351	shall issue and deliver the certificate of authorization to
352	transact business. Any credit union which fails to open for
353	business within 6 months after the issuance of such certificate
354	will forfeit its existence as a credit union, and the
355	certificate of authorization shall be revoked. For good cause
356	shown, the office may extend the opening date for an additional
357	6 months on its own motion or at the request of the credit
358	union. Amounts credited on share accounts, less expenditures
359	authorized by law, shall be returned pro rata to the respective
360	account holders.
361	(10)  All preopening costs and expenses in connection with
362	the organization of the credit union and preparation for opening
363	for business may be paid only from funds provided by the
364	organizers or a sponsor and may be reimbursed by the credit
365	union only out of undivided earnings, after provision has been
366	made for reserves and dividends. However, the credit union may
367	record reimburse, as an operating expense, costs for forms, and
368	supplies, insurance, rent, and other expenses applicable to or
369	consumed in the period after opening in accordance with rules
370	adopted by the commission.
371	Section 9.  Subsection (1) of section 657.0061, Florida
372	Statutes, is amended to read:
373	657.0061  Amendments to bylaws.--
374	(1)  All bylaw amendments must be submitted to the office.
375	The office shall approve or disapprove bylaw amendments within
376	60 days after receipt. The office shall approve the proposed
377	bylaw amendment unless it finds that the amendment:
378	(a)  Is not in the best interest of the membership;
379	(b)  Is not in accord with sound credit union practices; or
380	(c)  Exposes the assets of the credit union to unnecessary
381	risks; or.
382	(d)  Is not in compliance with applicable laws or rules.
383	Section 10.  Subsections (1), (2), (5), (6), and (7) of
384	section 657.008, Florida Statutes, are amended to read:
385	657.008  Place of doing business.--
386	(1)  Every credit union authorized to transact business
387	pursuant to the laws of this state shall have one principal
388	place of doing business as designated in its bylaws and where
389	legal process shall be served. A credit union may change its
390	place of business through an amendment to its bylaws.
391	(2)(a)  With 30 days' prior written notification to the
392	office, or within such other time as may be approved by the
393	office, a credit union operating in a safe and sound manner may
394	maintain branches at locations other than its main office or
395	relocate branches previously established if the maintenance of
396	such branches is determined by the board of directors to be
397	reasonably necessary to furnish service to its members.
398	(b)  Investments in such branch offices shall comply with
399	the limitations imposed by s. 657.042(5).
400	(b)(c)  If any branch is located outside this state, the
401	cost of examining such branch shall be borne by the credit
402	union. Such cost shall include, but shall not be limited to,
403	examiner travel expense and per diem.
404	(5)  A credit union may change its principal place of
405	business within this state upon approval by the office.
406	(5)(6)(a)  The office may authorize foreign credit unions
407	to establish branches in Florida if all of the following
408	criteria are met:
409	1.  The state in which the foreign credit union's home
410	office is located permits Florida credit unions to do business
411	in the state under restrictions that are no greater than those
412	placed upon a domestic credit union doing business in that
413	state. For this purpose, such restrictions shall include, but
414	are not limited to, any fees, bonds, or other charges levied on
415	domestic credit unions doing business in that state.
416	2.  The deposits of such foreign credit union and its
417	proposed Florida branch shall have insurance of accounts with
418	the National Credit Union Administration will be insured or
419	guaranteed by an insurer or guarantor acceptable to the office.
420	Insurance or guarantee of accounts comparable to that provided
421	by the Florida Credit Union Guaranty Corporation is deemed to be
422	acceptable; however, acceptance of insurance or guarantee of
423	accounts by any insuring or guaranteeing agencies or companies
424	shall be subject to a determination by the office that the
425	insuring or guaranteeing agency or company is in sound financial
426	condition and that its reserves with respect to its insured or
427	guaranteed accounts are no less than those of the Florida Credit
428	Union Guaranty Corporation.
429	3.  The credit union's field of membership is so limited as
430	to be within that meaning of that term as defined in s. 657.002.
431	(b)  Every foreign credit union operating in Florida shall
432	keep the office informed of every location at which it is
433	operating.
434	(c)  If the office has reason to believe that a foreign
435	credit union is operating a branch in this state in an unsafe
436	and unsound manner, it shall have the right to examine such
437	branch. If, upon examination, the office finds that such branch
438	is operating in an unsafe and unsound manner, it shall require
439	the branch office to make appropriate modifications to bring
440	such branch operations into compliance with generally accepted
441	credit union operation in this state. Such foreign credit union
442	shall reimburse the office for the full cost of this
443	examination. Costs shall include examiner salaries, per diem,
444	and travel expenses.
445	(d)  Any foreign credit union operating in this state shall
446	in any connection therewith be subject to suit in the courts of
447	this state, by this state and the citizens of this state.
448	(6)(7)  A credit union may provide, directly or through a
449	contract with another company, off-premises armored car services
450	to its members. Armored car services do not constitute a branch
451	for the purposes of this section.
452	Section 11.  Section 657.021, Florida Statutes, is amended
453	to read:
454	657.021  Board of directors; executive committee.--
455	(1)  The credit union shall have a board of directors
456	consisting of at least five directors to be elected from the
457	members in the manner and for such terms as prescribed in the
458	bylaws.
459	(2)  Directors shall hold office for such terms as the
460	bylaws provide.
461	(2)(3)  Each director, upon assuming office, shall
462	acknowledge that he or she is familiar with his or her
463	responsibilities as a director and that he or she will
464	diligently and honestly administer the affairs of such credit
465	union and will not knowingly violate, or willfully permit to be
466	violated, any of the provisions of the financial institutions
467	codes or pertinent rules of the commission. The signed copy of
468	such oath shall be filed with the office within 30 days after
469	election.
470	(3)(4)  The board of directors shall fill any vacancies on
471	the board by appointment until successors are elected as
472	provided in the bylaws.
473	(4)(5)  The board of directors and the executive committee
474	shall meet as often as required in the bylaws.
475	(5)(6)  The board of directors must ensure that determine
476	the general direction of the business affairs, manage the funds,
477	and maintain the records of the credit union is managed in a
478	manner that is consistent with safe and sound credit union
479	practices.
480	(6)(7)  The board of directors shall must exercise the
481	following duties which are nondelegable:
482	(a)  Obtain and maintain officer and director liability
483	insurance and blanket bond coverage under such terms, amounts,
484	and limitations established by rules adopted by the commission
485	Require any officer or employee who has custody of or handles
486	funds to give bond with good and sufficient surety in an amount
487	and character determined by the board of directors in compliance
488	with rules adopted by the commission.
489	(b)  Establish the maximum amount of credit which may be
490	extended to a member and establish written credit policies,
491	including, without limitation, security requirements and terms
492	of repayment.
493	(b)(c)  Establish written policies governing all areas of
494	operations loans, investments, equity, personnel, collections,
495	the conduct of officers, employees, and committee members, and
496	continuing education for directors and committee members and
497	other policies necessary for prudent credit union practices in
498	accordance with the rules of the commission.
499	(c)(d)  Declare any dividends on shares.
500	(d)(e)  Adequately provide for reserves as required by this
501	chapter or by rules or order of the commission or office or as
502	otherwise determined necessary by the board.
503	(e)(f)  Employ a chief executive officer, whose title may
504	be either president or general manager, or, in lieu thereof,
505	designate any board member the treasurer to act as the chief
506	executive officer and to be in active charge of the affairs of
507	the credit union.
508	(8)  The board of directors must exercise the following
509	duties, which may be delegated within specific guidelines and
510	policies established by board resolutions:
511	(f)(a)  Act on applications for membership, or appoint one
512	or more membership officers to approve or deny applications for
513	membership, under such conditions as may be determined by policy
514	of the board of directors prescribed in the bylaws. A record of
515	a membership officer's approval or denial of membership must be
516	made available to the board for inspection. A person denied
517	membership by a membership officer may appeal the denial to the
518	board.
519	(g)(b)  Determine, from time to time, the interest rate or
520	rates which are charged on extensions of credit and authorize
521	any interest refunds to members from income earned and received
522	in proportion to the interest paid by them on such classes of
523	credit and under such conditions as the board prescribes.
524	(h)(c)  Determine the interest rates which will be paid on
525	deposits and the manner of calculating those rates.
526	(i)(d)  Invest funds, except that the board may designate
527	an investment committee or any qualified individual to make
528	investments pursuant to written policies established by the
529	board.
530	(j)  Designate a depository or depositories for the funds
531	of the credit union under such conditions as the board
532	prescribes.
533
534	Nothing in this subsection shall prohibit the board from
535	delegating, within specific guidelines and policies established
536	by board resolutions, those functions delineated in paragraph
537	(f), paragraph (g), paragraph (h), paragraph (i), or paragraph
538	(j).
539	(7)(9)  The board of directors has authority, which may not
540	be delegated, to:
541	(a)  Limit the number of shares and the amount of deposits
542	which may be owned by a member, which limitation must apply to
543	all members.
544	(b)  Designate a depository or depositories for the funds
545	of the credit union.
546	(b)(c)  Suspend and remove any member of any of its
547	committees for failure to perform his or her duties or for other
548	just cause.
549	(c)(d)  Establish any committee determined to be necessary
550	and appoint its membership.
551	(d)(e)  Call special meetings of the members.
552	(10)  The board of directors has authority, which may be
553	delegated within specific guidelines and policies established by
554	board resolutions, to:
555	(a)  Authorize the employment of persons necessary to carry
556	on the business of the credit union.
557	(b)  Authorize the purchase, lease, rental, or sale of
558	personal property necessary to carry on the business of the
559	credit union.
560	(c)  Borrow or lend money to carry on the functions of the
561	credit union.
562	(8)(11)  The board of directors may appoint an executive
563	committee that which may be authorized to act for the board in
564	all respects, subject to such conditions and limitations as are
565	prescribed by the board in writing. The executive committee
566	shall be composed of the executive officers as defined in s.
567	657.022.
568	Section 12.  Subsection (1) of section 657.022, Florida
569	Statutes, is amended to read:
570	657.022  Executive officers.--
571	(1)  At the organizational meeting and within 31 7 days
572	following each annual meeting of the members, the directors
573	shall hold the annual meeting of the board of directors and
574	elect from their own number a presiding officer, who may be
575	designated as chair of the board or president; one or more vice
576	chairs or one or more vice presidents, as the case may be; a
577	treasurer; and a secretary. The treasurer and the secretary may
578	be the same individual. The persons so elected shall be the
579	executive officers of the organization.
580	Section 13.  Subsection (3) of section 657.023, Florida
581	Statutes, is amended to read:
582	657.023  Membership.--
583	(3)  A credit union may not restrict any member's rights,
584	except that the credit union may close the account and terminate
585	the membership of any member whose actions have resulted in any
586	financial loss to the credit union, or for good cause.
587	Section 14.  Subsection (2) of section 657.024, Florida
588	Statutes, is amended to read:
589	657.024  Membership meetings.--
590	(2)  Each member shall have one vote. Mail Ballots may be
591	distributed in advance to the entire membership as prescribed in
592	the bylaws. No person shall exercise the vote of any other
593	member.
594	Section 15.  Paragraph (c) of subsection (3) and subsection
595	(4) of section 657.026, Florida Statutes, are amended to read:
596	657.026  Supervisory or audit committee.--
597	(3)  The supervisory or audit committee shall:
598	(c)  Submit a report of every required audit or examination
599	within a reasonable time to the board of directors with a copy
600	to the office and, depending upon which organization is
601	applicable, a copy to the corporation or the National Credit
602	Union Administration.
603	(4)  The supervisory or audit committee shall notify the
604	board of directors, the office, and, as applicable, either the
605	corporation or the National Credit Union Administration of any
606	violation of this chapter, any violation of the certificate of
607	authorization or bylaws of the credit union, or any practice of
608	the credit union deemed by the supervisory or audit committee to
609	materially affect or that may potentially materially affect the
610	safety and soundness of the credit union be unsafe, unsound, or
611	unauthorized.
612
613	For the purposes of this subsection, two-thirds of the members
614	of the supervisory or audit committee constitutes a quorum.
615	Section 16.  Subsection (2) of section 657.027, Florida
616	Statutes, is amended to read:
617	657.027  Credit committee and credit manager.--
618	(2)  In lieu of a credit committee, the board of directors
619	may provide for a credit manager to approve or disapprove credit
620	under written conditions prescribed by the board and as provided
621	in the bylaws. The board of directors may designate and empower
622	the chief executive officer as the credit manager, or may
623	authorize the chief executive officer to employ a credit
624	manager, as provided in the bylaws. In the event a credit
625	manager is designated or employed, the procedures prescribed in
626	subsection (1) do not apply, and no credit shall be extended
627	unless approved by the credit manager; except that the credit
628	manager may appoint one or more loan officers with the power to
629	approve or disapprove credit, subject to such limitations or
630	conditions as prescribed by the chief executive officer.
631	Section 17.  Subsections (2) and (3) of section 657.028,
632	Florida Statutes, are amended to read:
633	657.028  Activities of directors, officers, committee
634	members, employees, and agents.--
635	(2)  An elected officer or director or any committee
636	member, other than the treasurer or the chief executive officer
637	serving in the capacity of treasurer, may not be compensated for
638	her or his service as such.
639	(3)  A person may not serve as an officer, director, or
640	committee member of a credit union if she or he:
641	(a)  Has been convicted of a felony or of an offense
642	involving dishonesty, a breach of trust, a violation of this
643	chapter, or fraud, except with the prior approval of the office
644	upon a showing of rehabilitation;
645	(b)  Has been adjudicated bankrupt within the previous 7
646	years;
647	(c)  Has been removed by any regulatory agency as a
648	director, officer, committee member, or employee of any
649	financial institution, except with the prior approval of the
650	office upon a showing of rehabilitation and upon showing of
651	ability to be bondable;
652	(d)  Has performed acts of fraud or dishonesty, or has
653	failed to perform duties, resulting in a loss which was subject
654	to a paid claim under a fidelity bond, except with the prior
655	approval of the office upon a showing of rehabilitation and upon
656	showing of ability to be bondable; or
657	(e)  Has been found guilty of a violation of s. 655.50,
658	relating to the Florida Control of Money Laundering in Financial
659	Institutions Act; chapter 896, relating to offenses related to
660	financial transactions; or any similar state or federal law.
661	Section 18.  Section 657.031, Florida Statutes, is amended
662	to read:
663	(Substantial rewording of section. See
664	s. 657.031, F.S., for current text.)
665	657.031  Powers of a credit union.--
666	(1)  When not in direct conflict with or superseded by
667	specific provisions of the financial institutions codes, the
668	general powers granted to corporations in s. 607.0302 shall
669	extend to credit unions formed under this chapter. This section
670	shall be liberally construed to accomplish the purposes stated
671	herein.
672	(2)  Except as provided in s. 607.0304 or specific
673	provisions of the financial institutions codes, the validity of a
674	credit union's action, including, but not limited to, any
675	conveyance, transfer, or encumbrance of real or personal property
676	to or by a credit union, may not be challenged on the ground that
677	the credit union lacks or lacked power to act.
678	(3)  The commission may adopt rules to delineate specific
679	credit union powers that are consistent with standard financial
680	institution practices, this chapter, and the financial
681	institutions codes.
682	Section 19.  Subsections (5) and (6) of section 657.033,
683	Florida Statutes, are amended, and subsections (7), (8), and (9)
684	are added to said section, to read:
685	657.033  Accounts.--
686	(5)  When there has not been any activity generated by the
687	member on the account for 12 24 months, such account shall be
688	considered a dormant account and shall be placed under an
689	accounting control system.
690	(6)  If the owner of a dormant account, a person named on
691	the account, or the beneficiary of the account has not had any
692	activity with a credit union for 5 7 years and the whereabouts
693	of those interested parties are unknown to the credit union,
694	that account is unclaimed or abandoned property and shall be
695	maintained pursuant to chapter 717.
696	(7)  A credit union may receive shares and deposits from
697	its members and other credit unions. However, a credit union may
698	not receive shares or deposits from persons, other than credit
699	unions, who are not members of the credit union, except to a
700	joint account for which at least one of the account holders is a
701	member of the credit union.
702	(8)  A credit union may participate in systems which allow
703	the transfer, withdrawal, or deposit of funds of credit unions
704	or credit union members by automated or electronic means and
705	hold membership in entities established to promote and
706	effectuate such systems, provided such participation is not
707	inconsistent with rules of the commission adopted to improve
708	service to the members and protect members' funds against
709	unreasonable risks.
710	(9)  A credit union shall obtain and maintain insurance of
711	accounts through the National Credit Union Administration.
712	Section 20.  Section 657.038, Florida Statutes, is amended
713	to read:
714	657.038  Loan powers.--
715	(1)  A credit union may extend credit to members for such
716	purpose and upon such security and terms as the credit
717	committee, credit manager, or loan officer approves, pursuant to
718	written loan policies established by the board of directors, or
719	as may otherwise be provided by law.
720	(2)(a)  For credit unions that have been opened for 5 years
721	or more, the total unsecured obligations outstanding from any
722	member must not exceed the greater of $500 or 15 percent of the
723	equity of the credit union. However,
724	(3)  the total obligations outstanding from any member must
725	not exceed the greater of $1,000 or 25 percent of the equity of
726	the credit union. The limitations provided in this subsection do
727	not apply to loans which are fully secured by assignment of
728	shares or deposits in the lending credit union.
729	(b)  For credit unions that have been opened for less than
730	5 years, the limitation on total obligations outstanding to any
731	member is 10 percent of the credit union's capital.
732
733	The limitations provided in this subsection do not apply to
734	loans which are fully secured by assignment of shares or
735	deposits in the lending credit union.
736	(4)  A member may receive credit in installments or in one
737	sum and may pay the whole or any part of his or her indebtedness
738	on any day on which the office of the credit union is open for
739	business.
740	(3)(5)  The credit committee or credit manager may approve
741	in advance, upon request of a member, a line of credit, and
742	disbursements may be granted to such member within the limit of
743	such line of credit. When a line of credit has been approved, no
744	additional credit applications are required as long as the
745	aggregate obligation does not exceed the limit of such line of
746	credit; however, no additional disbursements may be made to any
747	member whose existing extensions of credit are in default or are
748	subject to adverse classification without receiving current
749	financial information.
750	(4)(6)  Loans secured by mortgages on real property must be
751	made in accordance with written policies of the board of
752	directors and rules of the commission.
753	(5)(7)  As used in this section, the term "related
754	interest" means a person's interest in a partnership as a
755	general partner, and any limited partnership, corporation, or
756	other business organization controlled by that person. A limited
757	partnership, corporation, or other business organization is
758	controlled by a person who:
759	(a)  Owns, controls, or has the power to vote 25 percent or
760	more of any class of voting securities of any such business
761	organization;
762	(b)  Controls in any manner the election of a majority of
763	the directors of any such business organization; or
764	(c)  Has the power to exercise a controlling influence over
765	the management or policies of such business organization.
766	(6)(8)  In computing the total liabilities of any person,
767	all loans endorsed or guaranteed as to repayment by such person
768	and by any related interest of such person must be included.
769	(7)(9)  A loan may not be made to any corporation, except
770	to the Florida Credit Union Guaranty Corporation, Inc., or a
771	corporation in which the credit union holds an equity interest.
772	(8)(10)  The loan limitations stated in this section shall
773	not be enlarged by the provision of any other section of this
774	chapter.
775	(9)(11)  Any approval of extension of credit requiring
776	approval of the board of directors shall be recorded in the
777	minutes of the board, including the borrower's account number or
778	other code, the amount of the loan, the maturity of the loan,
779	and the general type of security.
780	(10)(12)  The commission may adopt rules to provide for
781	minimum documentation and safe lending procedures necessary to
782	protect the members' funds.
783	(11)(13)  A credit union may participate in extensions of
784	credit to its members jointly with other credit unions,
785	corporations, or financial institutions.
786	(12)(14)  A credit union may participate in guaranteed loan
787	programs of the federal and state governments, provided the
788	borrower is a member of the credit union.
789	(13)(15)  If approved by the board of directors, a credit
790	union may extend credit to other credit unions, or to the
791	corporation, in an amount not greater than 25 percent of the
792	unimpaired capital of the lending credit union.
793	(14)(16)  A credit union may purchase the conditional sales
794	contracts, notes, and similar instruments of its members,
795	provided that the credit union could have originally made the
796	loan to the member.
797	(15)  A credit union may issue credit cards and debit cards
798	to allow members to obtain access to their shares, deposits, and
799	extensions of credit, provided such issuance is not inconsistent
800	with the rules of the commission. The commission, by rule, may
801	allow the use of devices similar to credit cards and debit cards
802	to allow members to obtain access to their shares, deposits, and
803	extensions of credit.
804	Section 21.  Subsection (1) of section 657.039, Florida
805	Statutes, is amended to read:
806	657.039  Loan powers; extension of credit to directors,
807	officers, committee members, and certain other persons
808	employees.--
809	(1)  A credit union may extend credit to its executive
810	officers, directors, credit manager, members of its supervisory,
811	audit, and credit committees, and any other person authorized to
812	approve extensions of credit, provided:
813	(a)  The extension of credit complies with all requirements
814	under this chapter with respect to credit extended to other
815	borrowers and is not on terms more favorable than those extended
816	to other borrowers.
817	(b)  The loan or aggregate of loans to any person or any
818	related interest of any person covered by this section which
819	exceeds $20,000 $5,000, except for share-secured or deposit-
820	secured credit, is approved in advance by the board of directors
821	with any interested person abstaining from voting.
822	(c)  Approved lines of credit, such as open-end loans, may
823	be funded without further approval by the board, but all
824	extensions of credit over $20,000 $5,000 to such persons must be
825	reviewed at least annually by the board of directors. Closed-end
826	loans which have been fully funded do not require annual review.
827	Section 22.  Paragraph (i) of subsection (1), subsection
828	(4), and paragraph (b) of subsection (5) of section 657.042,
829	Florida Statutes, are amended to read:
830	657.042  Investment powers and limitations.--A credit union
831	may invest its funds subject to the following definitions,
832	restrictions, and limitations:
833	(1)  INVESTMENTS NOT SUBJECT TO LIMITATIONS.--There is no
834	limitation with respect to the capital of the investing credit
835	union on the following investments:
836	(i)  Stock of the Federal National Mortgage Association,
837	Federal Home Loan Bank, or any other similar entity designated
838	by the office, designed to promote investment in residential
839	mortgages, which may be purchased and retained as required in
840	connection with mortgage transactions with the association or
841	entity.
842	(4)  INVESTMENT SUBJECT TO LIMITATION OF ONE PERCENT OF
843	CAPITAL OF THE CREDIT UNION.--Up to 1 percent of the capital of
844	the credit union or $15,000, whichever is greater, may be
845	invested in any of the following:
846	(a)  Corporate obligations of any one corporation which is
847	an affiliate or subsidiary of the credit union or a service
848	corporation, except that the total investment in all such
849	corporate obligations shall not exceed 10 percent of the capital
850	of the credit union.
851	(b)  Any capital participation instrument or evidence of
852	indebtedness issued by the Florida Black Business Investment
853	Board pursuant to the Florida Small and Minority Business
854	Assistance Act of 1985.
855	(5)  INVESTMENTS IN REAL ESTATE AND EQUIPMENT FOR THE
856	CREDIT UNION.--
857	(b)  The limitations provided by this subsection may be
858	exceeded with the prior written approval of the office. The
859	office shall grant such approval if it is satisfied that:
860	1.  The proposed investment is necessary.
861	2.  The amount thereof is commensurate with the size and
862	needs of the credit union.
863	3.  The investment will be beneficial to the members.
864	4.  A reasonable plan is developed to reduce the investment
865	to limits provided by law.
866	Section 23.  Section 657.043, Florida Statutes, is amended
867	to read:
868	657.043  Reserves.--
869	(1)  TRANSFERS TO REGULAR RESERVE.--Immediately before
870	paying each dividend, the total of all income for the period
871	shall be determined. From this amount, there shall be set aside
872	sums as a regular reserve in accordance with the following
873	schedule:
874	(a)  A credit union shall set aside:
875	1.  Five percent of the total of all income for the period,
876	until the regular reserve equals 6 percent of the risk assets,
877	then,
878	2.  Two percent of the total of all income for the period,
879	until the regular reserve equals 8 percent of the risk assets.
880	(b)  Whenever the ratio of regular reserves to risk assets
881	falls below the stated percent, it shall be replenished by
882	regular contributions as provided in paragraph (a).
883	(c)  The office may decrease the reserve requirements set
884	forth in this subsection when in its opinion such a decrease is
885	necessary to preserve the fiscal soundness of the credit union.
886	(1)(2)  ALLOWANCE FOR LOAN LOSSES ACCOUNT.--The credit
887	union shall maintain an account for loan and lease losses. The
888	amount in the account must equal the board's estimate of losses
889	in the loan portfolio and be consistent with applicable United
890	States generally accepted accounting principles and industry
891	guidance provided by requlatory agencies or as required by the
892	office rules of the commission. The account must be provided
893	for, before paying a dividend, in the manner provided by rule.
894	This account constitutes part of the regular reserve for the
895	purpose of determining the ratio of regular reserves to risk
896	assets.
897	(2)(3)  USE OF REGULAR RESERVE.--The regular reserve shall
898	belong to the credit union and shall be used to meet losses. In
899	the event of a decrease, the office may require additional
900	transfers to the regular reserve above the amount required by
901	subsection (1) until the decrease has been restored. The regular
902	reserve may not be decreased without the prior written approval
903	of the office or as provided by rule of the commission.
904	(4)  RISK ASSETS DEFINED.--The following assets shall be
905	considered risk assets:
906	(a)  All loans, except:
907	1.  Loans fully secured by a pledge of shares or deposits
908	in the lending credit union, equal to and maintained to at least
909	the amount of the loan outstanding.
910	2.  Loans which are purchased from liquidating credit
911	unions and guaranteed by the corporation or insured by the
912	National Credit Union Administration or other insuring agencies.
913	3.  Investments in or loans to the corporation.
914	(b)  All investments that have remaining maturities greater
915	than 3 years, unless a specific reserve has been established to
916	mark the investment to current market value.
917	(c)  Uninsured or nonguaranteed deposits and shares in
918	financial depository institutions, except deposits in the
919	Federal Reserve Bank, the Federal Home Loan Bank, the Southeast
920	Corporate Federal Credit Union, and any other corporate credit
921	union.
922	(d)  All investments in commercial paper and bonds.
923	(e)  All investments in banker's acceptances.
924	(f)  All investments in federal funds.
925	(g)  All investments that are authorized pursuant to
926	subsection (6) or subsection (7).
927	(h)  Fixed assets greater than the statutory limit imposed
928	by this chapter, unless a specific reserve has been established
929	for the excess.
930	(3)(5)  ALLOWANCE FOR INVESTMENT LOSSES.--The credit union
931	may maintain a contra asset account to provide an allowance for
932	investment losses, which will not be included in the
933	determination of equity. The account must be maintained
934	consistent with the rules of the commission.
935	(4)(6)  SPECIAL RESERVES.--In addition to such regular
936	reserve, special reserves shall be established:
937	(a)  To protect members against losses resulting from
938	credit extended or from risk assets when required by rule, or
939	when found by the office, in any special case, to be necessary
940	for that purpose; or
941	(b)  As authorized by the board of directors.
942	(5)  BORROWING MONEY.??A credit union may borrow money and
943	issue evidences of indebtedness for any loan in the usual course
944	of its business and secure such obligations by mortgage or
945	pledge of any of its assets. Aggregate borrowings shall not
946	exceed 50 percent of the capital that is not impaired by losses
947	of the credit union. However, this percentage limitation shall
948	not apply to loans from the National Credit Union
949	Administration.
950	(7)  RESERVE FOR CONTINGENCIES.--The board of directors
951	may, after the regular reserve required by this section and
952	rules of the commission has been set aside, transfer a portion
953	of undivided earnings to an auxiliary reserve account to provide
954	for additional possible losses and expenses.
955	(8)  RESERVES.--The ratio of equity to total assets for
956	each credit union must be maintained at not less than 5 percent.
957	At the end of the calendar quarter when this ratio is determined
958	to be less than 5 percent, the credit union shall, within 60
959	days thereafter, prepare and file with the office for approval a
960	plan to achieve the minimum ratio within 4 years, or such longer
961	period of time approved by the office. Once achieved, each
962	credit union must maintain a ratio of equity to total assets of
963	not less than 5 percent, unless otherwise authorized by the
964	office. The commission, by rule, shall prescribe the
965	information, types of restrictions and limitations on
966	operations, reporting requirements, and other criteria that are
967	required to be included in an acceptable plan. An acceptable
968	plan must recognize the unique characteristics and risk
969	differences for the individual credit union.
970	(9)  GUARANTY ASSISTANCE AGREEMENT.--The amount of any
971	liability arising out of a guaranty assistance agreement with
972	the corporation or National Credit Union Administration must be
973	maintained as a reserve and be included in the determination of
974	undivided earnings of the credit union.
975	Section 24.  Section 657.062, Florida Statutes, is amended
976	to read:
977	657.062  Conservatorship Assumption of control by guarantor
978	or insurer.--
979	(1)  The office may appoint direct the corporation or the
980	National Credit Union Administration as conservator of a credit
981	union to take possession and, whichever is applicable, to assume
982	control of the property, assets, and business of its member
983	credit union and to operate it subject to the directions of the
984	office whenever:
985	(a)  Whenever The office finds that the credit union:
986	1.  Is engaging or has engaged in an unsafe or unsound
987	practice;
988	2.  Is violating or has violated any provision of this
989	chapter; or
990	3.  Is violating or has violated any commission rule,
991	office order, or written agreement entered into with the office,
992
993	in such a manner that the credit union is threatened with
994	imminent insolvency;.
995	(b)  Whenever A majority of the members of the board of
996	directors of the credit union have been removed by the office or
997	the National Credit Union Administration or shall have resigned;
998	or
999	(c)  The credit union is significantly undercapitalized and
1000	has no reasonable prospect of becoming adequately capitalized.
1001	The commission may define by rule criteria for determining if a
1002	credit union is undercapitalized or adequately capitalized. In
1003	defining such criteria, the commission shall consider the
1004	definitions contained in Section 216 of The Federal Credit Union
1005	Act, 12 U.S.C. s. 1790d.
1006	(2)  Except when prohibited by federal or state law, in the
1007	event of conservatorship assumption of control, the conservator
1008	guarantor or insurer may appoint elect the board of directors
1009	and the operating committees and may, without penalty or
1010	liability, prepay any deposit accounts; terminate any contracts
1011	or agreements with employees, independent contractors, or
1012	consultants; terminate any contract or agreement with any person
1013	to provide goods, products, or services if the performance of
1014	such contract would adversely affect the safety or soundness of
1015	the credit unions or if such contract was entered into in
1016	violation of s. 657.0315(1); and terminate or assign any lease
1017	for property. The authority of the conservator guarantor or
1018	insurer to continue operation of a credit union shall continue
1019	for a period not to exceed 180 days, unless extended by the
1020	office for an additional period or periods not to exceed 180
1021	days each at the request of the conservator guarantor or
1022	insurer, or unless involuntary liquidation proceedings have been
1023	initiated by the office. In the event that the conservator
1024	guarantor or insurer does assume control pursuant to the
1025	direction of the office, a meeting of the credit union shall be
1026	called within 180 days, or within the period of extension as
1027	approved by the office, for the specific purpose of electing a
1028	new board of directors, who shall take office when the
1029	conservator guarantor or insurer surrenders control, or
1030	considering such other recommendations as the conservator
1031	guarantor or insurer and the office may make.
1032	Section 25.  Subsections (1), (2), and (3) of section
1033	657.063, Florida Statutes, are amended to read:
1034	657.063  Involuntary liquidation.--
1035	(1)  If the office finds that any credit union is bankrupt
1036	or insolvent or imminently insolvent;, or is transacting its
1037	business in an unsound, unsafe, or unauthorized manner such that
1038	it is threatened with imminent insolvency, and liquidation is in
1039	the best interest of the members; or is undercapitalized and has
1040	no reasonable prospect of becoming adequately capitalized, the
1041	office may, in its discretion, order the credit union placed in
1042	involuntary liquidation and designate and appoint a liquidator
1043	to take charge of the assets and affairs of the credit union.
1044	The order shall set forth the specific findings and reasons for
1045	the action taken. The commission may define by rule criteria for
1046	determining if a credit union is undercapitalized or adequately
1047	capitalized. In defining such criteria, the commission shall
1048	consider the definitions contained in Section 216 of The Federal
1049	Credit Union Act, 12 U.S.C. s. 1790d.
1050	(2)  The liquidator must be appointed by the office. The
1051	corporation or the National Credit Union Administration,
1052	whichever is applicable, must be given the right of first
1053	refusal. The office may appoint another entity if refused by the
1054	primary guarantor or insurer.
1055	(3)  Upon appointment and in accordance with the directions
1056	of the office, the liquidator shall take possession and charge
1057	of all of the assets, books, and records of the credit union and
1058	shall take charge of the affairs, business, and operations of
1059	the credit union and shall have all of the powers of the board
1060	of directors, credit committee, credit manager, and supervisory
1061	committee of the credit union. The liquidator shall continue the
1062	business operation of the credit union for a period not to
1063	exceed 180 days, subject to the direction of the office. The
1064	liquidator shall have full authority to make loans and
1065	investments and to permit deposits to or withdrawals from
1066	accounts by members, except that during the period of such
1067	operation by the liquidator, no withdrawal from any account or
1068	accounts which are not fully insured or guaranteed shall be
1069	permitted. Except when prohibited by federal or state law, the
1070	liquidator may, without penalty or liability, prepay any deposit
1071	accounts; terminate any contracts or agreements with employees,
1072	independent contractors, or consultants; terminate any contract
1073	or agreement with any person to provide goods, products, or
1074	services if the performance of such contract would adversely
1075	affect the safety or soundness of the credit union that was
1076	entered into in violation of s. 657.0315(1) or s. 657.062(2);
1077	and terminate or assign any lease for property. The liquidator
1078	shall proceed with a liquidation of assets by sale or transfer
1079	of assets and conversion of assets into cash or liquid
1080	investments in preparation for distribution to members on
1081	account of shares and deposits. The liquidator shall have
1082	specific authority to sell loan assets. The liquidator may enter
1083	into agreements for the sale or transfer of loans and other
1084	assets with the assumption of outstanding share and deposit
1085	accounts, which assumption constitutes full and complete
1086	distribution to members on account of shares and deposits.
1087	Section 26.  Subsections (1), (4), (5), and (7) of section
1088	657.064, Florida Statutes, are amended to read:
1089	657.064  Voluntary liquidation.--A credit union may elect
1090	to dissolve voluntarily and liquidate its affairs in the
1091	following manner:
1092	(1)  Before considering any resolution pertaining to
1093	voluntary liquidation by the board of directors, the credit
1094	union must inform the office and the corporation or the National
1095	Credit Union Administration, whichever is applicable, of the
1096	time and place of the meeting of the board of directors. The
1097	notification must be transmitted at least 10 5 days before the
1098	board of directors meets.
1099	(4)  Upon adoption by the board of directors of a
1100	resolution recommending that the credit union be voluntarily
1101	liquidated, the office corporation or the National Credit Union
1102	Administration, whichever is applicable, may restrict control or
1103	give directions with respect to the continued business of the
1104	credit union pending consideration of the voluntary liquidation
1105	by the members. During such period, no member shall withdraw an
1106	aggregate amount in excess of the insurance or guaranty covered
1107	by the credit union. No new extensions of credit shall be funded
1108	during the period between the board of directors' adoption of
1109	the resolution recommending the voluntary liquidation and the
1110	membership meeting called to consider the voluntary liquidation,
1111	except for loans fully secured by a pledge of shares and for the
1112	funding of outstanding loan commitments approved before the
1113	board of directors adopts the resolution.
1114	(5)  The notice required by subsection (3) shall also be
1115	mailed to the office and the National Credit Union
1116	Administration within 5 days after the action of the board of
1117	directors. Within 10 days after the meeting of the membership,
1118	the board of directors shall notify the office and the
1119	corporation or the National Credit Union Administration,
1120	whichever is applicable, in writing of the action taken by the
1121	members.
1122	(7)  The corporation or the National Credit Union
1123	Administration, whichever is applicable, shall have the right of
1124	first refusal to be appointed as liquidator of any liquidating
1125	credit union which it guarantees or insures. The liquidator
1126	shall have all of the powers provided in s. 657.063 regarding
1127	involuntary liquidation. If the corporation or the National
1128	Credit Union Administration declines shall decline to serve as
1129	liquidator, the board of directors shall appoint a reasonable
1130	person as liquidator and specify the extent of responsibilities
1131	and authority delegated to the liquidator.
1132	Section 27.  Section 657.065, Florida Statutes, is amended
1133	to read:
1134	(Substantial rewording of section. See
1135	s. 657.065, F.S., for current text.)
1136	657.065  Merger.--
1137	(1)  Upon filing of an application with the office by
1138	constituent credit unions and upon approval by the office,
1139	credit unions may be merged with a surviving state credit union,
1140	as prescribed in this code, except the action by a merging
1141	federal credit union shall be taken in the manner prescribed by,
1142	and shall be subject to, any limitations or requirements imposed
1143	by federal laws and regulations. The application shall be
1144	accompanied by a merger plan and agreement together with a
1145	certified copy of the authorizing resolutions of the board of
1146	directors of the constituent credit unions showing approval by a
1147	majority of the entire board of directors of each credit union,
1148	as provided in this section, and a nonrefundable application fee
1149	of $500. The fee may be waived by the office for a merger
1150	pursuant to subsection (6).
1151	(2)  Nothing in the laws of this state restricts the right
1152	of a state credit union to merge with a surviving federal credit
1153	union. In such case, the action to be taken by a merging state
1154	credit union, and its rights and liabilities and those of its
1155	members, shall be the same as those prescribed by the applicable
1156	federal laws or regulations for merging federal credit unions at
1157	the time of the action.
1158	(3)  If the resulting credit union will be a state credit
1159	union, the constituent merging credit unions shall adopt a
1160	merger plan and agreement stating the method, terms, and
1161	conditions of the merger, including all agreements concerning
1162	the merger. The board of directors of each constituent credit
1163	union shall, by majority vote of the entire board, approve the
1164	merger plan and agreement, which shall contain:
1165	(a)  The name and address of the merging and surviving
1166	credit union.
1167	(b)  The date, time, and place of the meeting at which the
1168	merger plan and agreement were approved by the merging and the
1169	surviving credit union's boards of directors.
1170	(c)  The name and address of the main office of the
1171	surviving credit union and each continuing branch office.
1172	(d)  The names, terms, and board positions of the surviving
1173	credit union's board of directors.
1174	(e)  The names and title of each executive officer.
1175	(f)  A list of any amendments needed to the surviving
1176	credit union's bylaws, if applicable, and attached to the
1177	agreement copies of such amendments.
1178	(g)  A statement that the merger and the merger plan and
1179	agreement are subject to approval by office and the National
1180	Credit Union Administration.
1181	(h)  Such additional provisions not contrary to law as may
1182	be agreed upon by the constituent credit unions and such other
1183	provisions as the office requires to enable the office to
1184	discharge its duties with respect to the merger.
1185	(4)  The office shall approve the application and the
1186	merger plan and agreement if the office finds that:
1187	(a)  The surviving credit union's net worth is adequate.
1188	(b)  The merger will not impair the ongoing viability of
1189	the surviving credit union.
1190
1191	If the office disapproves a merger plan and agreement, the
1192	office shall state its objections and, the provisions of chapter
1193	120 notwithstanding, give an opportunity to the merging and
1194	surviving credit unions to amend the merger plan and agreement
1195	to eliminate such objections.
1196	(5)  Approval by the office, by final order or otherwise,
1197	of the application and merger plan and agreement shall be deemed
1198	subject to approval by the members of the merging credit union
1199	who vote on the merger at a meeting duly called for that
1200	purpose. Such approval shall be documented by the submission of
1201	a copy of:
1202	(a)  The notice of intent to merge given to the surviving
1203	credit union.
1204	(b)  The notice of the meeting duly called to consider the
1205	merger to the members of the merging credit union. Such notice
1206	shall disclose the purpose of the meeting and the date, time,
1207	and place of the meeting.
1208	(c)  The resolution adopted by the membership confirming
1209	the vote on the merger.
1210
1211	Unless the approval of the merging credit union has been
1212	obtained and proper evidence thereof submitted to the office
1213	within 6 months after the approval by the office, the approval
1214	by the office of the merger and merger plan and agreement shall
1215	be deemed to be revoked and terminated; however, the office on
1216	its own motion, or at the request of the merging or surviving
1217	credit unions for good cause shown, may extend the time for a
1218	period not to exceed 6 months.
1219	(6)  Notwithstanding any other provisions of this chapter
1220	or of chapter 120, a credit union may merge without the vote of
1221	the membership when the office determines that the credit union
1222	is in danger of insolvency or that the credit union is
1223	significantly undercapitalized, as defined in Section 216 of The
1224	Federal Credit Union Act, 12 U.S.C. s. 1790d, and the merger
1225	will enable the credit union to avoid liquidation.
1226	(7)  A merger with a resulting state credit union may not
1227	take place or be effective unless approved by the National
1228	Credit Union Administration and the office issues a certificate
1229	of merger. Upon consummation of the merger, the certificate of
1230	authorization of the merged credit union shall be returned to
1231	the proper authority to be canceled. Also, at consummation, all
1232	property and property rights of, and members' interest in, the
1233	merged credit union shall vest in the surviving credit union
1234	without deed, endorsement, or other instrument of transfer and
1235	all debts, obligations, and liabilities of the merged credit
1236	union shall be assumed by the surviving credit union under the
1237	certificate of authorization under which the merger was
1238	effected. All members of the surviving credit union have the
1239	same rights, privileges, and responsibilities after the merger
1240	is completed. The certificate of merger must be recorded in the
1241	public records of all counties in which the merging credit union
1242	owned any real property at the effective date of the merger.
1243	Section 28.  Section 657.066, Florida Statutes, is amended
1244	to read:
1245	657.066  Conversion from state credit union to federal
1246	credit union and conversely.--Any credit union organized under
1247	this chapter may convert into a federal credit union and any
1248	federal credit union may convert into a credit union organized
1249	pursuant to this chapter upon approval of the authority under
1250	the supervision of which the converted credit union will operate
1251	and upon compliance with applicable laws.
1252	(1)  Any action by the board of directors proposing
1253	conversion shall be by resolution and shall require the
1254	affirmative vote of an absolute majority of the board of
1255	directors. Upon adoption of a resolution relating to conversion,
1256	a copy of the resolution shall be mailed to each member,
1257	together with a notice setting forth the time, location, and
1258	purpose of a meeting of the membership which shall be held not
1259	less than 10 nor more than 30 days following the mailing of the
1260	notice.
1261	(2)  A ballot allowing an affirmative or negative vote on
1262	the proposed conversion shall also be mailed to each member. Any
1263	ballot received by the credit union prior to the meeting called
1264	to consider the conversion shall be counted along with the votes
1265	cast at the meeting. Each member shall have but one vote. A
1266	majority of the votes cast by the members shall be required to
1267	approve the conversion.
1268	(2)(3)  Within 10 days after the approval of the
1269	membership, The board of directors shall cause to be transmitted
1270	to the authority under the supervision of which the converted
1271	credit union will operate a copy of the resolution adopted by
1272	the board of directors and a conversion application approved by
1273	the membership.
1274	(3)(4)  Upon the written approval of the authority under
1275	the supervision of which the converting credit union is to
1276	operate, the converting credit union shall become a credit union
1277	under this chapter or under the laws of the United States, as
1278	the case may be, and thereupon all assets shall become the
1279	property of the converted credit union, subject to all existing
1280	liabilities against the credit union. All shares and deposits
1281	shall remain intact. Any federal credit union seeking to convert
1282	to a state-chartered credit union shall pay a nonrefundable
1283	filing fee of $500. The office may conduct an examination of any
1284	converting federal credit union before approving the conversion
1285	and the converting credit union shall pay a nonrefundable
1286	examination fee as provided in s. 655.411(1)(b).
1287	(4)  Upon the approval of the authority under the
1288	supervision of which the converted credit union will operate, a
1289	copy of the resolution shall be provided to each member,
1290	together with a notice setting forth the time, location, and
1291	purpose of a meeting of the membership which shall be held not
1292	less than 10 or more that 30 days following the transmission of
1293	the notice.
1294	(5)  A ballot allowing an affirmative or negative vote on
1295	the proposed conversion shall also be provided to each member.
1296	Any ballot received by the credit union prior to the meeting
1297	called to consider the conversion shall be counted along with
1298	the votes cast at the meeting. Each member shall have only a
1299	single vote. A majority of the votes cast by the members shall
1300	be required to approve the conversion.
1301	(6)  Within 10 days after the approval by the membership,
1302	the board of directors shall cause to be transmitted to the
1303	authority under the supervision of which the converted credit
1304	union will operate a copy of the resolution adopted by the board
1305	of directors and approved by the membership with confirmation of
1306	the vote.
1307	(7)(5)  Every conversion must be completed within 90 days
1308	after the approval of the authority under the supervision of
1309	which the converted credit union will operate. Upon receiving
1310	its certificate of authorization or charter from the authority
1311	under the supervision of which the converted credit union will
1312	operate, the old certificate of authorization or charter shall
1313	be returned to the proper authority and shall be canceled.
1314	(8)(6)  In consummation of the conversion, the old credit
1315	union may execute, acknowledge, and deliver to the newly
1316	chartered credit union the instruments of transfer necessary to
1317	accomplish the transfer of any property and all right, title,
1318	and interest therein.
1319	Section 29.  Subsection (7) of section 658.43, Florida
1320	Statutes, is amended to read:
1321	658.43  Approval by office; valuation of assets; emergency
1322	action.--
1323	(7)  Notwithstanding any other provisions of the financial
1324	institutions codes or of chapter 120, if the office or the
1325	appropriate federal regulatory agency finds that immediate
1326	action is necessary in order to prevent the probable failure of
1327	one or more banks, associations, or trust companies, which in
1328	this subsection may be referred to as a "failing financial
1329	entity," the office shall have the power, with the concurrence
1330	of the appropriate federal regulatory agency in the case of any
1331	bank or association the deposits of which are insured by the
1332	Federal Deposit Insurance Corporation, to issue an emergency
1333	order authorizing:
1334	(a)  The merger of any such failing financial entity with a
1335	state bank;
1336	(b)  The merger of any such failing financial entity with a
1337	state trust company;
1338	(c)  Any state bank to acquire assets and assume
1339	liabilities of any such failing financial entity, including all
1340	rights, powers, and responsibilities as fiduciary in instances
1341	where the failing financial institution is actively engaged in
1342	the exercise of trust powers;
1343	(d)  Any state trust company to acquire assets and assume
1344	liabilities of any such failing trust company and rights,
1345	powers, and responsibilities as fiduciary of such failing trust
1346	company;
1347	(e)  The conversion of any such failing financial entity
1348	into a state bank or trust company;
1349	(f)  The chartering of a new state bank or state
1350	association to acquire assets and assume liabilities of any such
1351	failing financial entity and to assume rights, powers, and
1352	responsibilities as fiduciary in cases where such failing
1353	financial entity is engaged in the exercise of trust powers; or
1354	(g)  The chartering of a new state trust company to acquire
1355	assets and assume liabilities and rights, powers, and
1356	responsibilities as fiduciary of such failing trust company.
1357
1358	Any such finding by the office shall be based upon reports
1359	furnished to it by a state bank, association, or trust company
1360	examiner or by a federal bank or association examiner or upon
1361	other evidence from which it is reasonable to conclude that any
1362	such bank, association, or trust company is insolvent or is
1363	threatened with imminent insolvency. The office may disallow
1364	illegally obtained currency, monetary instruments, funds, or
1365	other financial resources from the capitalization requirements
1366	of this section. The stockholders of a failing bank,
1367	association, or trust company that is acquired by another bank
1368	or trust company pursuant to this subsection shall be entitled
1369	to the same procedural rights and to compensation for the
1370	remaining value of their shares as is provided for dissenters in
1371	s. 658.44, except that they shall have no right to vote against
1372	the transaction. Any transaction authorized by this subsection
1373	may be accomplished through the organization of a successor
1374	institution.
1375	Section 30.  Sections 657.0315, 657.051, 657.055, and
1376	657.068, Florida Statutes, are repealed.
1377	Section 31.  This act shall take effect July 1, 2005.

CODING: Words stricken are deletions; words underlined are additions.