HB 1733

CS

CHAMBER ACTION

1	The Civil Justice Committee recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5	A bill to be entitled
6	An act relating to financial institutions and
7	transactions; amending s. 655.005, F.S.; revising
8	definitions; creating s. 655.0201, F.S.; providing
9	requirements and procedures for service of process,
10	notice, or demand on financial institutions; amending s.
11	655.044, F.S.; establishing the fiscal year end for
12	financial institutions; amending s. 655.057, F.S.;
13	removing references to the Florida Credit Union Guaranty
14	Corporation, Inc.; amending s. 655.411, F.S.; correcting a
15	cross reference; creating s. 655.4185, F.S.; authorizing
16	the Office of Financial Regulation to issue certain
17	emergency orders authorizing certain actions that may be
18	taken against a failing financial entity; specifying
19	findings necessary for such orders; authorizing the office
20	to take certain enforcement actions; protecting
21	stockholder procedural rights and compensation
22	entitlements; amending s. 657.002, F.S.; revising
23	definitions; amending s. 657.005, F.S.; revising
24	application procedures for authority to organize a credit
25	union; amending s. 657.0061, F.S.; providing an additional
26	ground for disapproval of a bylaw amendment; amending s.
27	657.008, F.S.; revising provisions relating to principal
28	place of doing business; revising notification dates and
29	conditions for maintaining branches; requiring deposits of
30	a foreign credit union to be insured by the National
31	Credit Union Administration; amending s. 657.021, F.S.;
32	revising provisions relating to a credit union's board of
33	directors; clarifying terms of board of directors members;
34	requiring a board of directors to manage a credit union in
35	a safe and sound manner; revising requirements and
36	authority of a board of directors; requiring officer and
37	director liability insurance and bond coverage;
38	authorizing delegation of certain functions; requiring
39	that policies on operations of a credit union accord with
40	commission rules; amending s. 657.022, F.S.; modifying the
41	time period for the annual meeting of the board of
42	directors; amending s. 657.023, F.S.; revising a credit
43	union's authority to close accounts and terminate
44	membership; amending s. 657.024, F.S.; revising procedures
45	for distribution of ballots; amending s. 657.026, F.S.;
46	deleting reference to the Florida Credit Union Guaranty
47	Corporation, Inc.; clarifying notification required to
48	board of directors and the office of any unsafe or unsound
49	practice; amending s. 657.027, F.S.; clarifying the
50	authority of a credit manager; amending s. 657.028, F.S.;
51	clarifying which persons may not be compensated for
52	service; revising the prohibition on persons who may not
53	serve as officer, director, or committee member; amending
54	s. 657.031, F.S.; specifying the powers of a credit union;
55	prohibiting challenges to the validity of certain actions
56	of a credit union under certain circumstances; requiring
57	the exercise of credit union powers to be approved by rule
58	of the Financial Services Commission or order of the
59	Office of Financial Regulation; amending s. 657.033, F.S.;
60	revising criteria for dormant accounts; revising a time
61	period for characterizing a dormant account as unclaimed
62	or abandoned property; specifying what shares and deposits
63	may be received by a credit union; authorizing credit
64	unions to participate in electronic fund transfer,
65	withdrawal, and deposit systems; requiring a credit union
66	to maintain account insurance; amending s. 657.038, F.S.;
67	revising limitations on total unsecured obligations;
68	providing an exception; revising loan and credit authority
69	of a credit union; authorizing a credit union to issue
70	credit cards and debit cards for certain purposes;
71	authorizing the commission to allow by rule for the use of
72	devices similar to credit card and debit cards; amending
73	s. 657.039, F.S.; revising a credit union's authority to
74	extend credit to its directors; revising credit
75	limitations; amending s. 657.042, F.S.; amending the
76	investment authority of a credit union; revising
77	limitations; amending s. 657.043, F.S.; revising
78	requirements for regular reserves, loan losses accounts,
79	investment losses, and special reserves; authorizing a
80	credit union to borrow money and issue evidence of
81	indebtedness; providing limitations; deleting provisions
82	relating to transfers to regular reserve, risk assets,
83	reserve for contingencies, equity to asset ratio
84	requirements, and guaranty assistance agreements; amending
85	s. 657.062, F.S.; providing requirements for appointment
86	of the National Credit Union Administration as conservator
87	of a credit union under certain circumstances; providing
88	criteria; amending s. 657.063, F.S.; revising requirements
89	for the involuntarily liquidation of a credit union;
90	authorizing the commission to define by rule criteria for
91	determining the adequacy of capitalization of a credit
92	union; amending s. 657.064, F.S.; revising requirements
93	and criteria for voluntary liquidation of a credit union;
94	removing references to the Florida Credit Union Guaranty
95	Corporation; amending s. 657.065, F.S.; revising
96	requirements, procedures, criteria, and limitations for
97	the merger of credit unions; providing requirements for
98	merger plans and agreements; providing authority and
99	requirements for the office to approve merger applications
100	and merger plans and agreements; providing for revocation
101	and termination of merger plans and agreements under
102	certain circumstances; providing for mergers without a
103	vote of membership under certain circumstances; requiring
104	approval of a merger by the National Credit Union
105	Administration and issuance by the office of a certificate
106	of merger; specifying consequences of mergers; preserving
107	rights of members; amending s. 657.066, F.S.; revising
108	requirements for conversion of a credit union from state
109	to federal and conversely; amending s. 658.43, F.S., to
110	conform; repealing s. 657.0315, F.S., relating to
111	contracts for providing goods, products, or services;
112	repealing s. 657.051, F.S., relating to the fiscal year of
113	a credit union; repealing s. 657.055, F.S., relating to
114	retention and destruction of records; repealing s.
115	657.068, F.S., relating to central credit unions;
116	providing an effective date.
117
118	Be It Enacted by the Legislature of the State of Florida:
119
120	Section 1.  Paragraphs (k) and (l) of subsection (1) of
121	section 655.005, Florida Statutes, are amended to read:
122	655.005  Definitions.--
123	(1)  As used in the financial institutions codes, unless
124	the context otherwise requires, the term:
125	(k)  "Imminently insolvent" means a condition in which a
126	financial institution has total capital accounts, or equity less
127	the allowance for loan losses in the case of a credit union, of
128	less than 2 percent of its total assets, after adjustment for
129	apparent losses.
130	(l)  "Insolvent" means a condition in which:
131	1.  The capital accounts, or equity less the allowance for
132	loan losses in the case of a credit union, and all assets of a
133	financial institution are insufficient to meet liabilities;
134	2.  The financial institution is unable to meet current
135	obligations as they mature, even though assets may exceed
136	liabilities; or
137	3.  The capital accounts, or equity less the allowance for
138	loan losses in the case of a credit union, of a financial
139	institution are exhausted by losses and no immediate prospect of
140	replacement exists.
141	Section 2.  Section 655.0201, Florida Statutes, is created
142	to read:
143	655.0201  Service of process, notice, or demand on
144	financial institutions.--
145	(1)  Process against any financial institution authorized
146	by federal or state law to transact business in this state may
147	be served in accordance with chapter 48, chapter 49, chapter
148	607, or chapter 608, as appropriate.
149	(2)  Any financial institution authorized by federal or
150	state law to transact business in this state may designate a
151	registered agent as the financial institution's agent for
152	service of process, notice, or demand required or permitted by
153	law to be served on the financial institution. If the financial
154	institution has no registered agent, or its registered agent
155	cannot with reasonable diligence be served, service may be made
156	on any executive officer of the financial institution at its
157	principal place of business in this state.
158	(3)  If service cannot be made in accordance with
159	subsection (2), service may be made on any officer, director, or
160	business agent of the financial institution at either its
161	principal place of business or any other branch, office, or
162	place of business in this state.
163	(4)  This section does not prescribe the only means, or
164	necessarily the required means, of serving notice or demand on a
165	financial institution.
166	Section 3.  Subsection (5) is added to section 655.044,
167	Florida Statutes, to read:
168	655.044  Accounting practices; bad debts ineligible to be
169	carried as assets.--
170	(5)  The fiscal year of a financial institution shall end
171	December 31.
172	Section 4.  Subsections (3) and (7) of section 655.057,
173	Florida Statutes, are amended to read:
174	655.057  Records; limited restrictions upon public
175	access.--
176	(3)  The provisions of this section do not prevent or
177	restrict:
178	(a)  Publishing reports required to be submitted to the
179	office pursuant to s. 655.045(2)(a) or required by applicable
180	federal statutes or regulations to be published.
181	(b)  Furnishing records or information to any other state,
182	federal, or foreign agency responsible for the regulation or
183	supervision of financial institutions, including Federal Home
184	Loan Banks.
185	(c)  Furnishing records or information, in the case of a
186	credit union, to the Florida Credit Union Guaranty Corporation,
187	Inc.
188	(c)(d)  Disclosing or publishing summaries of the condition
189	of financial institutions and general economic and similar
190	statistics and data, provided that the identity of a particular
191	financial institution is not disclosed.
192	(d)(e)  Reporting any suspected criminal activity, with
193	supporting documents and information, to appropriate law
194	enforcement and prosecutorial agencies.
195	(e)(f)  Furnishing information upon request to the Chief
196	Financial Officer or the Division of Treasury of the Department
197	of Financial Services regarding the financial condition of any
198	financial institution that is, or has applied to be, designated
199	as a qualified public depository pursuant to chapter 280.
200
201	Any confidential information or records obtained from the office
202	pursuant to this subsection shall be maintained as confidential
203	and exempt from the provisions of s. 119.07(1).
204	(7)  Materials supplied to the office or to employees of
205	any financial institution by other governmental agencies,
206	federal or state, or the Florida Credit Union Guaranty
207	Corporation, Inc., shall remain the property of the submitting
208	agency or the corporation, and any document request must be made
209	to the appropriate agency. Any confidential documents supplied
210	to the office or to employees of any financial institution by
211	other governmental agencies, federal or state, or by the Florida
212	Credit Union Guaranty Corporation, Inc., shall be confidential
213	and exempt from the provisions of s. 119.07(1). Such information
214	shall be made public only with the consent of such agency or the
215	corporation.
216	Section 5.  Paragraph (b) of subsection (1) of section
217	655.411, Florida Statutes, is amended to read:
218	655.411  Conversion of charter.--
219	(1)  Any financial entity may apply to the office for
220	permission to convert its charter without a change of business
221	form or convert its charter in order to do business as another
222	type of financial entity in accordance with the following
223	procedures:
224	(b)  Following approval by the board of directors, the
225	conversion plan, together with a certified copy of the
226	authorizing resolution adopted by the board, must be submitted
227	to the office for approval before being submitted to the members
228	or stockholders of the financial entity. The application for
229	conversion must be in the form prescribed by the commission,
230	contain such additional information as the commission or office
231	reasonably requires, and be accompanied by a filing fee in
232	accordance with s. 657.066(3)(4) or s. 658.73. Additionally, the
233	office is authorized to assess any financial entity, applying to
234	convert pursuant to this section, a nonrefundable examination
235	fee to cover the actual costs of any examination required as a
236	part of the application process.
237	Section 6.  Section 655.4185, Florida Statutes, is created
238	to read:
239	655.4185  Emergency action.--
240	(1)  Notwithstanding any other provisions of the financial
241	institutions codes or of chapter 120, if the office or the
242	appropriate federal regulatory agency finds that immediate
243	action is necessary in order to prevent the probable failure of
244	one or more financial institutions, which in this subsection may
245	be referred to as a "failing financial entity," the office may,
246	with the concurrence of the appropriate federal regulatory
247	agency in the case of any financial institution the deposits of
248	which are insured by the Federal Deposit Insurance Corporation
249	or the National Credit Union Administration, issue an emergency
250	order authorizing:
251	(a)  The merger of any such failing financial entity with
252	an appropriate state financial entity;
253	(b)  An appropriate state financial entity to acquire the
254	assets and assume the liabilities of any such failing financial
255	entity, including all rights, powers, and responsibilities as
256	fiduciary in instances in which the failing financial
257	institution is actively engaged in the exercise of trust powers;
258	(c)  The conversion of any such failing financial entity
259	into a state financial entity; or
260	(d)  The chartering of a new state financial entity to
261	acquire the assets and assume the liabilities of any such
262	failing financial entity and to assume rights, powers, and
263	responsibilities as fiduciary in cases in which such failing
264	financial entity is engaged in the exercise of trust powers.
265	(2)  Any such finding by the office shall be based upon
266	reports furnished to the office by a state or federal financial
267	institution examiner or upon other evidence from which it is
268	reasonable to conclude that any such financial institution is
269	insolvent or is threatened with imminent insolvency. The office
270	may disallow illegally obtained currency, monetary instruments,
271	funds, or other financial resources from the capitalization
272	requirements of the financial institution codes. The
273	stockholders of a failing bank, association, or trust company
274	that is acquired by another bank or trust company pursuant to
275	this section shall be entitled to the same procedural rights and
276	to compensation for the remaining value of their shares as is
277	provided for dissenters in s. 658.44, except that they shall
278	have no right to vote against the transaction. Any transaction
279	authorized by this section may be accomplished through the
280	organization of a successor institution.
281	Section 7.  Section 657.002, Florida Statutes, is amended
282	to read:
283	657.002  Definitions.--As used in this chapter:
284	(1)  "Capital" means shares, deposits, and equity.
285	(2)  "Central credit union" means a credit union the
286	membership of which includes, but is not limited to, other
287	credit unions, members of credit unions, credit union employees,
288	employees of organizations serving credit unions, and the
289	families of such members.
290	(2)(3)  "Corporate credit union" means any central credit
291	union organized pursuant to any state or federal act for the
292	purpose of serving other credit unions.
293	(4)  "The corporation" means the Florida Credit Union
294	Guaranty Corporation, Inc.
295	(3)(5)  "Correspondent" means that person designated on an
296	application to organize a credit union as the person to whom all
297	correspondence regarding the application should be sent.
298	(4)(6)  "Credit union" means any cooperative society
299	organized pursuant to this chapter.
300	(5)(7)  "Deposits" means that portion of the money placed
301	capital paid into the credit union by members on which a
302	contractual rate of interest may will be paid.
303	(6)(8)  "Equity" means undivided earnings, regular
304	reserves, and other reserves allowance for loan losses.
305	(7)(9)  "Foreign credit union" means a credit union
306	organized and operating under the laws of another state.
307	(8)(10)  "Immediate family" means parents, children,
308	spouse, or surviving spouse of the member, or any other relative
309	by blood, marriage, or adoption.
310	(9)(11)  "Limited field of membership" means the defined
311	group of persons designated as eligible for membership in the
312	credit union who:
313	(a)  Have a similar profession, occupation, or formal
314	association with an identifiable purpose; or
315	(b)  Live or work Reside within an identifiable
316	neighborhood, community, rural district, or county; or
317	(c)  Are employed by a common employer; or
318	(d)  Are employed by the credit union; and
319
320	members of the immediate family of persons within such group.
321	(10)(12)  "Shares" means that portion of the money capital
322	paid into the credit union by members on which dividends may be
323	paid.
324	(13)  "Unimpaired capital" means capital which is not
325	impaired by losses that exceed applicable reserves.
326	Section 8.  Subsection (1), paragraphs (a) and (d) of
327	subsection (3), paragraph (b) of subsection (5), and subsections
328	(9) and (10) of section 657.005, Florida Statutes, are amended
329	to read:
330	657.005  Application for authority Notice of intent to
331	organize a credit union; investigation; application for
332	authority to organize a credit union.--
333	(1)  The proposed organizers of the proposed credit union
334	shall file with the office an application a notice of intent to
335	organize, upon such form as the commission may, by rule,
336	prescribe.
337	(3)  The application shall be submitted to the office on
338	forms and in the manner prescribed by rules adopted by the
339	commission and shall be accompanied by a nonrefundable filing
340	fee of $250. Such application shall include:
341	(a)  The proposed name and the proposed location where the
342	proposed credit union is to have its principal place of business
343	and where legal service must be served.
344	(d)  Any information required by the commission or office
345	to be submitted to the National Credit Union Administration
346	corporation or insuring agency.
347	(5)  The application shall be approved if the office
348	determines that:
349	(b)  The qualifications of the proposed board of directors
350	and committee members are such as to indicate a reasonable
351	likelihood that the affairs of the proposed credit union will be
352	administered consistently with applicable laws and sound
353	financial and credit union practices;
354	(9)  The office shall perform a preopening examination to
355	verify good faith compliance with all the requirements of law.
356	If the office finds that such requirements have been met, it
357	shall issue and deliver the certificate of authorization to
358	transact business. Any credit union which fails to open for
359	business within 6 months after the issuance of such certificate
360	will forfeit its existence as a credit union, and the
361	certificate of authorization shall be revoked. For good cause
362	shown, the office may extend the opening date for an additional
363	6 months on its own motion or at the request of the credit
364	union. Amounts credited on share accounts, less expenditures
365	authorized by law, shall be returned pro rata to the respective
366	account holders.
367	(10)  All preopening costs and expenses in connection with
368	the organization of the credit union and preparation for opening
369	for business may be paid only from funds provided by the
370	organizers or a sponsor and may be reimbursed by the credit
371	union only out of undivided earnings, after provision has been
372	made for reserves and dividends. However, the credit union may
373	record reimburse, as an operating expense, costs for forms, and
374	supplies, insurance, rent, and other expenses applicable to or
375	consumed in the period after opening in accordance with rules
376	adopted by the commission.
377	Section 9.  Subsection (1) of section 657.0061, Florida
378	Statutes, is amended to read:
379	657.0061  Amendments to bylaws.--
380	(1)  All bylaw amendments must be submitted to the office.
381	The office shall approve or disapprove bylaw amendments within
382	60 days after receipt. The office shall approve the proposed
383	bylaw amendment unless it finds that the amendment:
384	(a)  Is not in the best interest of the membership;
385	(b)  Is not in accord with sound credit union practices; or
386	(c)  Exposes the assets of the credit union to unnecessary
387	risks; or.
388	(d)  Is not in compliance with applicable laws or rules.
389	Section 10.  Subsections (1), (2), (5), (6), and (7) of
390	section 657.008, Florida Statutes, are amended to read:
391	657.008  Place of doing business.--
392	(1)  Every credit union authorized to transact business
393	pursuant to the laws of this state shall have one principal
394	place of doing business as designated in its bylaws and where
395	legal process shall be served. A credit union may change its
396	place of business through an amendment to its bylaws.
397	(2)(a)  With 30 days' prior written notification to the
398	office, or within such other time as may be approved by the
399	office, a credit union operating in a safe and sound manner may
400	maintain branches at locations other than its main office or
401	relocate branches previously established if the maintenance of
402	such branches is determined by the board of directors to be
403	reasonably necessary to furnish service to its members.
404	(b)  Investments in such branch offices shall comply with
405	the limitations imposed by s. 657.042(5).
406	(b)(c)  If any branch is located outside this state, the
407	cost of examining such branch shall be borne by the credit
408	union. Such cost shall include, but shall not be limited to,
409	examiner travel expense and per diem.
410	(5)  A credit union may change its principal place of
411	business within this state upon approval by the office.
412	(5)(6)(a)  The office may authorize foreign credit unions
413	to establish branches in Florida if all of the following
414	criteria are met:
415	1.  The state in which the foreign credit union's home
416	office is located permits Florida credit unions to do business
417	in the state under restrictions that are no greater than those
418	placed upon a domestic credit union doing business in that
419	state. For this purpose, such restrictions shall include, but
420	are not limited to, any fees, bonds, or other charges levied on
421	domestic credit unions doing business in that state.
422	2.  The deposits of such foreign credit union and its
423	proposed Florida branch shall have insurance of accounts with
424	the National Credit Union Administration will be insured or
425	guaranteed by an insurer or guarantor acceptable to the office.
426	Insurance or guarantee of accounts comparable to that provided
427	by the Florida Credit Union Guaranty Corporation is deemed to be
428	acceptable; however, acceptance of insurance or guarantee of
429	accounts by any insuring or guaranteeing agencies or companies
430	shall be subject to a determination by the office that the
431	insuring or guaranteeing agency or company is in sound financial
432	condition and that its reserves with respect to its insured or
433	guaranteed accounts are no less than those of the Florida Credit
434	Union Guaranty Corporation.
435	3.  The credit union's field of membership is so limited as
436	to be within that meaning of that term as defined in s. 657.002.
437	(b)  Every foreign credit union operating in Florida shall
438	keep the office informed of every location at which it is
439	operating.
440	(c)  If the office has reason to believe that a foreign
441	credit union is operating a branch in this state in an unsafe
442	and unsound manner, it shall have the right to examine such
443	branch. If, upon examination, the office finds that such branch
444	is operating in an unsafe and unsound manner, it shall require
445	the branch office to make appropriate modifications to bring
446	such branch operations into compliance with generally accepted
447	credit union operation in this state. Such foreign credit union
448	shall reimburse the office for the full cost of this
449	examination. Costs shall include examiner salaries, per diem,
450	and travel expenses.
451	(d)  Any foreign credit union operating in this state shall
452	in any connection therewith be subject to suit in the courts of
453	this state, by this state and the citizens of this state.
454	(6)(7)  A credit union may provide, directly or through a
455	contract with another company, off-premises armored car services
456	to its members. Armored car services do not constitute a branch
457	for the purposes of this section.
458	Section 11.  Section 657.021, Florida Statutes, is amended
459	to read:
460	657.021  Board of directors; executive committee.--
461	(1)  The credit union shall have a board of directors
462	consisting of at least five directors to be elected from the
463	members in the manner and for such terms as prescribed in the
464	bylaws.
465	(2)  Directors shall hold office for such terms as the
466	bylaws provide.
467	(2)(3)  Each director, upon assuming office, shall
468	acknowledge that he or she is familiar with his or her
469	responsibilities as a director and that he or she will
470	diligently and honestly administer the affairs of such credit
471	union and will not knowingly violate, or willfully permit to be
472	violated, any of the provisions of the financial institutions
473	codes or pertinent rules of the commission. The signed copy of
474	such oath shall be filed with the office within 30 days after
475	election.
476	(3)(4)  The board of directors shall fill any vacancies on
477	the board by appointment until successors are elected as
478	provided in the bylaws.
479	(4)(5)  The board of directors and the executive committee
480	shall meet as often as required in the bylaws.
481	(5)(6)  The board of directors must ensure that determine
482	the general direction of the business affairs, manage the funds,
483	and maintain the records of the credit union is managed in a
484	manner that is consistent with safe and sound credit union
485	practices.
486	(6)(7)  The board of directors shall must exercise the
487	following duties which are nondelegable:
488	(a)  Obtain and maintain officer and director liability
489	insurance and blanket bond coverage under such terms, amounts,
490	and limitations established by rules adopted by the commission
491	Require any officer or employee who has custody of or handles
492	funds to give bond with good and sufficient surety in an amount
493	and character determined by the board of directors in compliance
494	with rules adopted by the commission.
495	(b)  Establish the maximum amount of credit which may be
496	extended to a member and establish written credit policies,
497	including, without limitation, security requirements and terms
498	of repayment.
499	(b)(c)  Establish written policies governing all areas of
500	operations loans, investments, equity, personnel, collections,
501	the conduct of officers, employees, and committee members, and
502	continuing education for directors and committee members and
503	other policies necessary for prudent credit union practices in
504	accordance with the rules of the commission.
505	(c)(d)  Declare any dividends on shares.
506	(d)(e)  Adequately provide for reserves as required by this
507	chapter or by rules or order of the commission or office or as
508	otherwise determined necessary by the board.
509	(e)(f)  Employ a chief executive officer, whose title may
510	be either president or general manager, or, in lieu thereof,
511	designate any board member the treasurer to act as the chief
512	executive officer and to be in active charge of the affairs of
513	the credit union.
514	(8)  The board of directors must exercise the following
515	duties, which may be delegated within specific guidelines and
516	policies established by board resolutions:
517	(f)(a)  Act on applications for membership, or appoint one
518	or more membership officers to approve or deny applications for
519	membership, under such conditions as may be determined by policy
520	of the board of directors prescribed in the bylaws. A record of
521	a membership officer's approval or denial of membership must be
522	made available to the board for inspection. A person denied
523	membership by a membership officer may appeal the denial to the
524	board.
525	(g)(b)  Determine, from time to time, the interest rate or
526	rates which are charged on extensions of credit and authorize
527	any interest refunds to members from income earned and received
528	in proportion to the interest paid by them on such classes of
529	credit and under such conditions as the board prescribes.
530	(h)(c)  Determine the interest rates which will be paid on
531	deposits and the manner of calculating those rates.
532	(i)(d)  Invest funds, except that the board may designate
533	an investment committee or any qualified individual to make
534	investments pursuant to written policies established by the
535	board.
536	(j)  Designate a depository or depositories for the funds
537	of the credit union under such conditions as the board
538	prescribes.
539
540	Nothing in this subsection shall prohibit the board from
541	delegating, within specific guidelines and policies established
542	by board resolutions, those functions delineated in paragraph
543	(f), paragraph (g), paragraph (h), paragraph (i), or paragraph
544	(j).
545	(7)(9)  The board of directors has authority, which may not
546	be delegated, to:
547	(a)  Limit the number of shares and the amount of deposits
548	which may be owned by a member, which limitation must apply to
549	all members.
550	(b)  Designate a depository or depositories for the funds
551	of the credit union.
552	(b)(c)  Suspend and remove any member of any of its
553	committees for failure to perform his or her duties or for other
554	just cause.
555	(c)(d)  Establish any committee determined to be necessary
556	and appoint its membership.
557	(d)(e)  Call special meetings of the members.
558	(10)  The board of directors has authority, which may be
559	delegated within specific guidelines and policies established by
560	board resolutions, to:
561	(a)  Authorize the employment of persons necessary to carry
562	on the business of the credit union.
563	(b)  Authorize the purchase, lease, rental, or sale of
564	personal property necessary to carry on the business of the
565	credit union.
566	(c)  Borrow or lend money to carry on the functions of the
567	credit union.
568	(8)(11)  The board of directors may appoint an executive
569	committee that which may be authorized to act for the board in
570	all respects, subject to such conditions and limitations as are
571	prescribed by the board in writing. The executive committee
572	shall be composed of the executive officers as defined in s.
573	657.022.
574	Section 12.  Subsection (1) of section 657.022, Florida
575	Statutes, is amended to read:
576	657.022  Executive officers.--
577	(1)  At the organizational meeting and within 31 7 days
578	following each annual meeting of the members, the directors
579	shall hold the annual meeting of the board of directors and
580	elect from their own number a presiding officer, who may be
581	designated as chair of the board or president; one or more vice
582	chairs or one or more vice presidents, as the case may be; a
583	treasurer; and a secretary. The treasurer and the secretary may
584	be the same individual. The persons so elected shall be the
585	executive officers of the organization.
586	Section 13.  Subsection (3) of section 657.023, Florida
587	Statutes, is amended to read:
588	657.023  Membership.--
589	(3)  A credit union may not restrict any member's rights,
590	except that the credit union may close the account and terminate
591	the membership of any member whose actions have resulted in any
592	financial loss to the credit union, or for good cause.
593	Section 14.  Subsection (2) of section 657.024, Florida
594	Statutes, is amended to read:
595	657.024  Membership meetings.--
596	(2)  Each member shall have one vote. Mail Ballots may be
597	distributed in advance to the entire membership as prescribed in
598	the bylaws. No person shall exercise the vote of any other
599	member.
600	Section 15.  Paragraph (c) of subsection (3) and subsection
601	(4) of section 657.026, Florida Statutes, are amended to read:
602	657.026  Supervisory or audit committee.--
603	(3)  The supervisory or audit committee shall:
604	(c)  Submit a report of every required audit or examination
605	within a reasonable time to the board of directors with a copy
606	to the office and, depending upon which organization is
607	applicable, a copy to the corporation or the National Credit
608	Union Administration.
609	(4)  The supervisory or audit committee shall notify the
610	board of directors, the office, and, as applicable, either the
611	corporation or the National Credit Union Administration of any
612	violation of this chapter, any violation of the certificate of
613	authorization or bylaws of the credit union, or any practice of
614	the credit union deemed by the supervisory or audit committee to
615	materially affect or that may potentially materially affect the
616	safety and soundness of the credit union be unsafe, unsound, or
617	unauthorized.
618
619	For the purposes of this subsection, two-thirds of the members
620	of the supervisory or audit committee constitutes a quorum.
621	Section 16.  Subsection (2) of section 657.027, Florida
622	Statutes, is amended to read:
623	657.027  Credit committee and credit manager.--
624	(2)  In lieu of a credit committee, the board of directors
625	may provide for a credit manager to approve or disapprove credit
626	under written conditions prescribed by the board and as provided
627	in the bylaws. The board of directors may designate and empower
628	the chief executive officer as the credit manager, or may
629	authorize the chief executive officer to employ a credit
630	manager, as provided in the bylaws. In the event a credit
631	manager is designated or employed, the procedures prescribed in
632	subsection (1) do not apply, and no credit shall be extended
633	unless approved by the credit manager; except that the credit
634	manager may appoint one or more loan officers with the power to
635	approve or disapprove credit, subject to such limitations or
636	conditions as prescribed by the chief executive officer.
637	Section 17.  Subsections (2) and (3) of section 657.028,
638	Florida Statutes, are amended to read:
639	657.028  Activities of directors, officers, committee
640	members, employees, and agents.--
641	(2)  An elected officer or director or any committee
642	member, other than the treasurer or the chief executive officer
643	serving in the capacity of treasurer, may not be compensated for
644	her or his service as such.
645	(3)  A person may not serve as an officer, director, or
646	committee member of a credit union if she or he:
647	(a)  Has been convicted of a felony or of an offense
648	involving dishonesty, a breach of trust, a violation of this
649	chapter, or fraud, except with the prior approval of the office
650	upon a showing of rehabilitation;
651	(b)  Has been adjudicated bankrupt within the previous 7
652	years;
653	(c)  Has been removed by any regulatory agency as a
654	director, officer, committee member, or employee of any
655	financial institution, except with the prior approval of the
656	office upon a showing of rehabilitation and upon showing of
657	ability to be bondable;
658	(d)  Has performed acts of fraud or dishonesty, or has
659	failed to perform duties, resulting in a loss which was subject
660	to a paid claim under a fidelity bond, except with the prior
661	approval of the office upon a showing of rehabilitation and upon
662	showing of ability to be bondable; or
663	(e)  Has been found guilty of a violation of s. 655.50,
664	relating to the Florida Control of Money Laundering in Financial
665	Institutions Act; chapter 896, relating to offenses related to
666	financial transactions; or any similar state or federal law.
667	Section 18.  Section 657.031, Florida Statutes, is amended
668	to read:
669	(Substantial rewording of section. See
670	s. 657.031, F.S., for current text.)
671	657.031  Powers of a credit union.--
672	(1)  When not in direct conflict with or superseded by
673	specific provisions of the financial institutions codes, the
674	general powers granted to corporations in s. 607.0302 shall
675	extend to credit unions formed under this chapter. This section
676	shall be liberally construed to accomplish the purposes stated
677	herein.
678	(2)  Except as provided in s. 607.0304 or specific
679	provisions of the financial institutions codes, the validity of
680	a credit union's action, including, but not limited to, any
681	conveyance, transfer, or encumbrance of real or personal
682	property to or by a credit union, may not be challenged on the
683	ground that the credit union lacks or lacked power to act.
684	(3)  A credit union formed under this chapter shall operate
685	as a financial institution, consistent with the provisions of
686	chapter 655 and this chapter, and may exercise such incidental
687	powers as are necessary or requisite to effectively carry out
688	the purposes for which it is organized, provided such exercise
689	is approved by rule or order of the commission or office.
690	Section 19.  Subsections (5) and (6) of section 657.033,
691	Florida Statutes, are amended, and subsections (7), (8), and (9)
692	are added to said section, to read:
693	657.033  Accounts.--
694	(5)  When there has not been any activity generated by the
695	member on the account for 12 24 months, such account shall be
696	considered a dormant account and shall be placed under an
697	accounting control system.
698	(6)  If the owner of a dormant account, a person named on
699	the account, or the beneficiary of the account has not had any
700	activity with a credit union for 5 7 years and the whereabouts
701	of those interested parties are unknown to the credit union,
702	that account is unclaimed or abandoned property and shall be
703	maintained pursuant to chapter 717.
704	(7)  A credit union may receive shares and deposits from
705	its members and other credit unions. However, a credit union may
706	not receive shares or deposits from persons, other than credit
707	unions, who are not members of the credit union, except to a
708	joint account for which at least one of the account holders is a
709	member of the credit union.
710	(8)  A credit union may participate in systems which allow
711	the transfer, withdrawal, or deposit of funds of credit unions
712	or credit union members by automated or electronic means and
713	hold membership in entities established to promote and
714	effectuate such systems, provided such participation is not
715	inconsistent with rules of the commission adopted to improve
716	service to the members and protect members' funds against
717	unreasonable risks.
718	(9)  A credit union shall obtain and maintain insurance of
719	accounts through the National Credit Union Administration.
720	Section 20.  Section 657.038, Florida Statutes, is amended
721	to read:
722	657.038  Loan powers.--
723	(1)  A credit union may extend credit to members for such
724	purpose and upon such security and terms as the credit
725	committee, credit manager, or loan officer approves, pursuant to
726	written loan policies established by the board of directors, or
727	as may otherwise be provided by law.
728	(2)(a)  For credit unions that have been opened for 5 years
729	or more, the total unsecured obligations outstanding from any
730	member must not exceed the greater of $500 or 15 percent of the
731	equity of the credit union. However,
732	(3)  the total obligations outstanding from any member must
733	not exceed the greater of $1,000 or 25 percent of the equity of
734	the credit union. The limitations provided in this subsection do
735	not apply to loans which are fully secured by assignment of
736	shares or deposits in the lending credit union.
737	(b)  For credit unions that have been opened for less than
738	5 years, the limitation on total obligations outstanding to any
739	member is 10 percent of the credit union's capital.
740
741	The limitations provided in this subsection do not apply to
742	loans which are fully secured by assignment of shares or
743	deposits in the lending credit union.
744	(4)  A member may receive credit in installments or in one
745	sum and may pay the whole or any part of his or her indebtedness
746	on any day on which the office of the credit union is open for
747	business.
748	(3)(5)  The credit committee or credit manager may approve
749	in advance, upon request of a member, a line of credit, and
750	disbursements may be granted to such member within the limit of
751	such line of credit. When a line of credit has been approved, no
752	additional credit applications are required as long as the
753	aggregate obligation does not exceed the limit of such line of
754	credit; however, no additional disbursements may be made to any
755	member whose existing extensions of credit are in default or are
756	subject to adverse classification without receiving current
757	financial information.
758	(4)(6)  Loans secured by mortgages on real property must be
759	made in accordance with written policies of the board of
760	directors and rules of the commission.
761	(5)(7)  As used in this section, the term "related
762	interest" means a person's interest in a partnership as a
763	general partner, and any limited partnership, corporation, or
764	other business organization controlled by that person. A limited
765	partnership, corporation, or other business organization is
766	controlled by a person who:
767	(a)  Owns, controls, or has the power to vote 25 percent or
768	more of any class of voting securities of any such business
769	organization;
770	(b)  Controls in any manner the election of a majority of
771	the directors of any such business organization; or
772	(c)  Has the power to exercise a controlling influence over
773	the management or policies of such business organization.
774	(6)(8)  In computing the total liabilities of any person,
775	all loans endorsed or guaranteed as to repayment by such person
776	and by any related interest of such person must be included.
777	(7)(9)  A loan may not be made to any corporation, except
778	to the Florida Credit Union Guaranty Corporation, Inc., or a
779	corporation in which the credit union holds an equity interest.
780	(8)(10)  The loan limitations stated in this section shall
781	not be enlarged by the provision of any other section of this
782	chapter.
783	(9)(11)  Any approval of extension of credit requiring
784	approval of the board of directors shall be recorded in the
785	minutes of the board, including the borrower's account number or
786	other code, the amount of the loan, the maturity of the loan,
787	and the general type of security.
788	(10)(12)  The commission may adopt rules to provide for
789	minimum documentation and safe lending procedures necessary to
790	protect the members' funds.
791	(11)(13)  A credit union may participate in extensions of
792	credit to its members jointly with other credit unions,
793	corporations, or financial institutions.
794	(12)(14)  A credit union may participate in guaranteed loan
795	programs of the federal and state governments, provided the
796	borrower is a member of the credit union.
797	(13)(15)  If approved by the board of directors, a credit
798	union may extend credit to other credit unions, or to the
799	corporation, in an amount not greater than 25 percent of the
800	unimpaired capital of the lending credit union.
801	(14)(16)  A credit union may purchase the conditional sales
802	contracts, notes, and similar instruments of its members,
803	provided that the credit union could have originally made the
804	loan to the member.
805	(15)  A credit union may issue credit cards and debit cards
806	to allow members to obtain access to their shares, deposits, and
807	extensions of credit, provided such issuance is not inconsistent
808	with the rules of the commission. The commission, by rule, may
809	allow the use of devices similar to credit cards and debit cards
810	to allow members to obtain access to their shares, deposits, and
811	extensions of credit.
812	Section 21.  Subsection (1) of section 657.039, Florida
813	Statutes, is amended to read:
814	657.039  Loan powers; extension of credit to directors,
815	officers, committee members, and certain other persons
816	employees.--
817	(1)  A credit union may extend credit to its executive
818	officers, directors, credit manager, members of its supervisory,
819	audit, and credit committees, and any other person authorized to
820	approve extensions of credit, provided:
821	(a)  The extension of credit complies with all requirements
822	under this chapter with respect to credit extended to other
823	borrowers and is not on terms more favorable than those extended
824	to other borrowers.
825	(b)  The loan or aggregate of loans to any person or any
826	related interest of any person covered by this section which
827	exceeds $20,000 $5,000, except for share-secured or deposit-
828	secured credit, is approved in advance by the board of directors
829	with any interested person abstaining from voting.
830	(c)  Approved lines of credit, such as open-end loans, may
831	be funded without further approval by the board, but all
832	extensions of credit over $20,000 $5,000 to such persons must be
833	reviewed at least annually by the board of directors. Closed-end
834	loans which have been fully funded do not require annual review.
835	Section 22.  Paragraph (i) of subsection (1), subsection
836	(4), and paragraph (b) of subsection (5) of section 657.042,
837	Florida Statutes, are amended to read:
838	657.042  Investment powers and limitations.--A credit union
839	may invest its funds subject to the following definitions,
840	restrictions, and limitations:
841	(1)  INVESTMENTS NOT SUBJECT TO LIMITATIONS.--There is no
842	limitation with respect to the capital of the investing credit
843	union on the following investments:
844	(i)  Stock of the Federal National Mortgage Association,
845	Federal Home Loan Bank, or any other similar entity designated
846	by the office, designed to promote investment in residential
847	mortgages, which may be purchased and retained as required in
848	connection with mortgage transactions with the association or
849	entity.
850	(4)  INVESTMENT SUBJECT TO LIMITATION OF ONE PERCENT OF
851	CAPITAL OF THE CREDIT UNION.--Up to 1 percent of the capital of
852	the credit union or $15,000, whichever is greater, may be
853	invested in any of the following:
854	(a)  Corporate obligations of any one corporation which is
855	an affiliate or subsidiary of the credit union or a service
856	corporation, except that the total investment in all such
857	corporate obligations shall not exceed 10 percent of the capital
858	of the credit union.
859	(b)  Any capital participation instrument or evidence of
860	indebtedness issued by the Florida Black Business Investment
861	Board pursuant to the Florida Small and Minority Business
862	Assistance Act of 1985.
863	(5)  INVESTMENTS IN REAL ESTATE AND EQUIPMENT FOR THE
864	CREDIT UNION.--
865	(b)  The limitations provided by this subsection may be
866	exceeded with the prior written approval of the office. The
867	office shall grant such approval if it is satisfied that:
868	1.  The proposed investment is necessary.
869	2.  The amount thereof is commensurate with the size and
870	needs of the credit union.
871	3.  The investment will be beneficial to the members.
872	4.  A reasonable plan is developed to reduce the investment
873	to limits provided by law.
874	Section 23.  Section 657.043, Florida Statutes, is amended
875	to read:
876	657.043  Reserves.--
877	(1)  TRANSFERS TO REGULAR RESERVE.--Immediately before
878	paying each dividend, the total of all income for the period
879	shall be determined. From this amount, there shall be set aside
880	sums as a regular reserve in accordance with the following
881	schedule:
882	(a)  A credit union shall set aside:
883	1.  Five percent of the total of all income for the period,
884	until the regular reserve equals 6 percent of the risk assets,
885	then,
886	2.  Two percent of the total of all income for the period,
887	until the regular reserve equals 8 percent of the risk assets.
888	(b)  Whenever the ratio of regular reserves to risk assets
889	falls below the stated percent, it shall be replenished by
890	regular contributions as provided in paragraph (a).
891	(c)  The office may decrease the reserve requirements set
892	forth in this subsection when in its opinion such a decrease is
893	necessary to preserve the fiscal soundness of the credit union.
894	(1)(2)  ALLOWANCE FOR LOAN LOSSES ACCOUNT.--The credit
895	union shall maintain an account for loan and lease losses. The
896	amount in the account must equal the board's estimate of losses
897	in the loan portfolio and be consistent with applicable United
898	States generally accepted accounting principles and industry
899	guidance provided by regulatory agencies or as required by the
900	office rules of the commission. The account must be provided
901	for, before paying a dividend, in the manner provided by rule.
902	This account constitutes part of the regular reserve for the
903	purpose of determining the ratio of regular reserves to risk
904	assets.
905	(2)(3)  USE OF REGULAR RESERVE.--The regular reserve shall
906	belong to the credit union and shall be used to meet losses. In
907	the event of a decrease, the office may require additional
908	transfers to the regular reserve above the amount required by
909	subsection (1) until the decrease has been restored. The regular
910	reserve may not be decreased without the prior written approval
911	of the office or as provided by rule of the commission.
912	(4)  RISK ASSETS DEFINED.--The following assets shall be
913	considered risk assets:
914	(a)  All loans, except:
915	1.  Loans fully secured by a pledge of shares or deposits
916	in the lending credit union, equal to and maintained to at least
917	the amount of the loan outstanding.
918	2.  Loans which are purchased from liquidating credit
919	unions and guaranteed by the corporation or insured by the
920	National Credit Union Administration or other insuring agencies.
921	3.  Investments in or loans to the corporation.
922	(b)  All investments that have remaining maturities greater
923	than 3 years, unless a specific reserve has been established to
924	mark the investment to current market value.
925	(c)  Uninsured or nonguaranteed deposits and shares in
926	financial depository institutions, except deposits in the
927	Federal Reserve Bank, the Federal Home Loan Bank, the Southeast
928	Corporate Federal Credit Union, and any other corporate credit
929	union.
930	(d)  All investments in commercial paper and bonds.
931	(e)  All investments in banker's acceptances.
932	(f)  All investments in federal funds.
933	(g)  All investments that are authorized pursuant to
934	subsection (6) or subsection (7).
935	(h)  Fixed assets greater than the statutory limit imposed
936	by this chapter, unless a specific reserve has been established
937	for the excess.
938	(3)(5)  ALLOWANCE FOR INVESTMENT LOSSES.--The credit union
939	may maintain a contra asset account to provide an allowance for
940	investment losses, which will not be included in the
941	determination of equity. The account must be maintained
942	consistent with the rules of the commission.
943	(4)(6)  SPECIAL RESERVES.--In addition to such regular
944	reserve, special reserves shall be established:
945	(a)  To protect members against losses resulting from
946	credit extended or from risk assets when required by rule, or
947	when found by the office, in any special case, to be necessary
948	for that purpose; or
949	(b)  As authorized by the board of directors.
950	(5)  BORROWING MONEY.??A credit union may borrow money and
951	issue evidences of indebtedness for any loan in the usual course
952	of its business and secure such obligations by mortgage or
953	pledge of any of its assets. Aggregate borrowings shall not
954	exceed 50 percent of the capital that is not impaired by losses
955	of the credit union. However, this percentage limitation shall
956	not apply to loans from the National Credit Union
957	Administration.
958	(7)  RESERVE FOR CONTINGENCIES.--The board of directors
959	may, after the regular reserve required by this section and
960	rules of the commission has been set aside, transfer a portion
961	of undivided earnings to an auxiliary reserve account to provide
962	for additional possible losses and expenses.
963	(8)  RESERVES.--The ratio of equity to total assets for
964	each credit union must be maintained at not less than 5 percent.
965	At the end of the calendar quarter when this ratio is determined
966	to be less than 5 percent, the credit union shall, within 60
967	days thereafter, prepare and file with the office for approval a
968	plan to achieve the minimum ratio within 4 years, or such longer
969	period of time approved by the office. Once achieved, each
970	credit union must maintain a ratio of equity to total assets of
971	not less than 5 percent, unless otherwise authorized by the
972	office. The commission, by rule, shall prescribe the
973	information, types of restrictions and limitations on
974	operations, reporting requirements, and other criteria that are
975	required to be included in an acceptable plan. An acceptable
976	plan must recognize the unique characteristics and risk
977	differences for the individual credit union.
978	(9)  GUARANTY ASSISTANCE AGREEMENT.--The amount of any
979	liability arising out of a guaranty assistance agreement with
980	the corporation or National Credit Union Administration must be
981	maintained as a reserve and be included in the determination of
982	undivided earnings of the credit union.
983	Section 24.  Section 657.062, Florida Statutes, is amended
984	to read:
985	657.062  Conservatorship Assumption of control by guarantor
986	or insurer.--
987	(1)  The office may appoint direct the corporation or the
988	National Credit Union Administration as conservator of a credit
989	union to take possession and, whichever is applicable, to assume
990	control of the property, assets, and business of its member
991	credit union and to operate it subject to the directions of the
992	office whenever:
993	(a)  Whenever The office finds that the credit union:
994	1.  Is engaging or has engaged in an unsafe or unsound
995	practice;
996	2.  Is violating or has violated any provision of this
997	chapter; or
998	3.  Is violating or has violated any commission rule,
999	office order, or written agreement entered into with the office,
1000
1001	in such a manner that the credit union is threatened with
1002	imminent insolvency;.
1003	(b)  Whenever A majority of the members of the board of
1004	directors of the credit union have been removed by the office or
1005	the National Credit Union Administration or shall have resigned;
1006	or
1007	(c)  The credit union is significantly undercapitalized and
1008	has no reasonable prospect of becoming adequately capitalized.
1009	The commission may define by rule criteria for determining if a
1010	credit union is undercapitalized or adequately capitalized. In
1011	defining such criteria, the commission shall consider the
1012	definitions contained in Section 216 of The Federal Credit Union
1013	Act, 12 U.S.C. s. 1790d.
1014	(2)  Except when prohibited by federal or state law, in the
1015	event of conservatorship assumption of control, the conservator
1016	guarantor or insurer may appoint elect the board of directors
1017	and the operating committees and may, without penalty or
1018	liability, prepay any deposit accounts; terminate any contracts
1019	or agreements with employees, independent contractors, or
1020	consultants; terminate any contract or agreement with any person
1021	to provide goods, products, or services if the performance of
1022	such contract would adversely affect the safety or soundness of
1023	the credit unions or if such contract was entered into in
1024	violation of s. 657.0315(1); and terminate or assign any lease
1025	for property. The authority of the conservator guarantor or
1026	insurer to continue operation of a credit union shall continue
1027	for a period not to exceed 180 days, unless extended by the
1028	office for an additional period or periods not to exceed 180
1029	days each at the request of the conservator guarantor or
1030	insurer, or unless involuntary liquidation proceedings have been
1031	initiated by the office. In the event that the conservator
1032	guarantor or insurer does assume control pursuant to the
1033	direction of the office, a meeting of the credit union shall be
1034	called within 180 days, or within the period of extension as
1035	approved by the office, for the specific purpose of electing a
1036	new board of directors, who shall take office when the
1037	conservator guarantor or insurer surrenders control, or
1038	considering such other recommendations as the conservator
1039	guarantor or insurer and the office may make.
1040	Section 25.  Subsections (1), (2), and (3) of section
1041	657.063, Florida Statutes, are amended to read:
1042	657.063  Involuntary liquidation.--
1043	(1)  If the office finds that any credit union is bankrupt
1044	or insolvent or imminently insolvent;, or is transacting its
1045	business in an unsound, unsafe, or unauthorized manner such that
1046	it is threatened with imminent insolvency, and liquidation is in
1047	the best interest of the members; or is undercapitalized and has
1048	no reasonable prospect of becoming adequately capitalized, the
1049	office may, in its discretion, order the credit union placed in
1050	involuntary liquidation and designate and appoint a liquidator
1051	to take charge of the assets and affairs of the credit union.
1052	The order shall set forth the specific findings and reasons for
1053	the action taken. The commission may define by rule criteria for
1054	determining if a credit union is undercapitalized or adequately
1055	capitalized. In defining such criteria, the commission shall
1056	consider the definitions contained in Section 216 of The Federal
1057	Credit Union Act, 12 U.S.C. s. 1790d.
1058	(2)  The liquidator must be appointed by the office. The
1059	corporation or the National Credit Union Administration,
1060	whichever is applicable, must be given the right of first
1061	refusal. The office may appoint another entity if refused by the
1062	primary guarantor or insurer.
1063	(3)  Upon appointment and in accordance with the directions
1064	of the office, the liquidator shall take possession and charge
1065	of all of the assets, books, and records of the credit union and
1066	shall take charge of the affairs, business, and operations of
1067	the credit union and shall have all of the powers of the board
1068	of directors, credit committee, credit manager, and supervisory
1069	committee of the credit union. The liquidator shall continue the
1070	business operation of the credit union for a period not to
1071	exceed 180 days, subject to the direction of the office. The
1072	liquidator shall have full authority to make loans and
1073	investments and to permit deposits to or withdrawals from
1074	accounts by members, except that during the period of such
1075	operation by the liquidator, no withdrawal from any account or
1076	accounts which are not fully insured or guaranteed shall be
1077	permitted. Except when prohibited by federal or state law, the
1078	liquidator may, without penalty or liability, prepay any deposit
1079	accounts; terminate any contracts or agreements with employees,
1080	independent contractors, or consultants; terminate any contract
1081	or agreement with any person to provide goods, products, or
1082	services if the performance of such contract would adversely
1083	affect the safety or soundness of the credit union that was
1084	entered into in violation of s. 657.0315(1) or s. 657.062(2);
1085	and terminate or assign any lease for property. The liquidator
1086	shall proceed with a liquidation of assets by sale or transfer
1087	of assets and conversion of assets into cash or liquid
1088	investments in preparation for distribution to members on
1089	account of shares and deposits. The liquidator shall have
1090	specific authority to sell loan assets. The liquidator may enter
1091	into agreements for the sale or transfer of loans and other
1092	assets with the assumption of outstanding share and deposit
1093	accounts, which assumption constitutes full and complete
1094	distribution to members on account of shares and deposits.
1095	Section 26.  Subsections (1), (4), (5), and (7) of section
1096	657.064, Florida Statutes, are amended to read:
1097	657.064  Voluntary liquidation.--A credit union may elect
1098	to dissolve voluntarily and liquidate its affairs in the
1099	following manner:
1100	(1)  Before considering any resolution pertaining to
1101	voluntary liquidation by the board of directors, the credit
1102	union must inform the office and the corporation or the National
1103	Credit Union Administration, whichever is applicable, of the
1104	time and place of the meeting of the board of directors. The
1105	notification must be transmitted at least 10 5 days before the
1106	board of directors meets.
1107	(4)  Upon adoption by the board of directors of a
1108	resolution recommending that the credit union be voluntarily
1109	liquidated, the office corporation or the National Credit Union
1110	Administration, whichever is applicable, may restrict control or
1111	give directions with respect to the continued business of the
1112	credit union pending consideration of the voluntary liquidation
1113	by the members. During such period, no member shall withdraw an
1114	aggregate amount in excess of the insurance or guaranty covered
1115	by the credit union. No new extensions of credit shall be funded
1116	during the period between the board of directors' adoption of
1117	the resolution recommending the voluntary liquidation and the
1118	membership meeting called to consider the voluntary liquidation,
1119	except for loans fully secured by a pledge of shares and for the
1120	funding of outstanding loan commitments approved before the
1121	board of directors adopts the resolution.
1122	(5)  The notice required by subsection (3) shall also be
1123	mailed to the office and the National Credit Union
1124	Administration within 5 days after the action of the board of
1125	directors. Within 10 days after the meeting of the membership,
1126	the board of directors shall notify the office and the
1127	corporation or the National Credit Union Administration,
1128	whichever is applicable, in writing of the action taken by the
1129	members.
1130	(7)  The corporation or the National Credit Union
1131	Administration, whichever is applicable, shall have the right of
1132	first refusal to be appointed as liquidator of any liquidating
1133	credit union which it guarantees or insures. The liquidator
1134	shall have all of the powers provided in s. 657.063 regarding
1135	involuntary liquidation. If the corporation or the National
1136	Credit Union Administration declines shall decline to serve as
1137	liquidator, the board of directors shall appoint a reasonable
1138	person as liquidator and specify the extent of responsibilities
1139	and authority delegated to the liquidator.
1140	Section 27.  Section 657.065, Florida Statutes, is amended
1141	to read:
1142	(Substantial rewording of section. See
1143	s. 657.065, F.S., for current text.)
1144	657.065  Merger.--
1145	(1)  Upon filing of an application with the office by
1146	constituent credit unions and upon approval by the office,
1147	credit unions may be merged with a surviving state credit union,
1148	as prescribed in this code, except the action by a merging
1149	federal credit union shall be taken in the manner prescribed by,
1150	and shall be subject to, any limitations or requirements imposed
1151	by federal laws and regulations. The application shall be
1152	accompanied by a merger plan and agreement together with a
1153	certified copy of the authorizing resolutions of the board of
1154	directors of the constituent credit unions showing approval by a
1155	majority of the entire board of directors of each credit union,
1156	as provided in this section, and a nonrefundable application fee
1157	of $500. The fee may be waived by the office for a merger
1158	pursuant to subsection (6).
1159	(2)  Nothing in the laws of this state restricts the right
1160	of a state credit union to merge with a surviving federal credit
1161	union. In such case, the action to be taken by a merging state
1162	credit union, and its rights and liabilities and those of its
1163	members, shall be the same as those prescribed by the applicable
1164	federal laws or regulations for merging federal credit unions at
1165	the time of the action.
1166	(3)  If the resulting credit union will be a state credit
1167	union, the constituent merging credit unions shall adopt a
1168	merger plan and agreement stating the method, terms, and
1169	conditions of the merger, including all agreements concerning
1170	the merger. The board of directors of each constituent credit
1171	union shall, by majority vote of the entire board, approve the
1172	merger plan and agreement, which shall contain:
1173	(a)  The name and address of the merging and surviving
1174	credit union.
1175	(b)  The date, time, and place of the meeting at which the
1176	merger plan and agreement were approved by the merging and the
1177	surviving credit union's boards of directors.
1178	(c)  The name and address of the main office of the
1179	surviving credit union and each continuing branch office.
1180	(d)  The names, terms, and board positions of the surviving
1181	credit union's board of directors.
1182	(e)  The names and title of each executive officer.
1183	(f)  A list of any amendments needed to the surviving
1184	credit union's bylaws, if applicable, and attached to the
1185	agreement copies of such amendments.
1186	(g)  A statement that the merger and the merger plan and
1187	agreement are subject to approval by office and the National
1188	Credit Union Administration.
1189	(h)  Such additional provisions not contrary to law as may
1190	be agreed upon by the constituent credit unions and such other
1191	provisions as the office requires to enable the office to
1192	discharge its duties with respect to the merger.
1193	(4)  The office shall approve the application and the
1194	merger plan and agreement if the office finds that:
1195	(a)  The surviving credit union's net worth is adequate.
1196	(b)  The merger will not impair the ongoing viability of
1197	the surviving credit union.
1198
1199	If the office disapproves a merger plan and agreement, the
1200	office shall state its objections and, the provisions of chapter
1201	120 notwithstanding, give an opportunity to the merging and
1202	surviving credit unions to amend the merger plan and agreement
1203	to eliminate such objections.
1204	(5)  Approval by the office, by final order or otherwise,
1205	of the application and merger plan and agreement shall be deemed
1206	subject to approval by the members of the merging credit union
1207	who vote on the merger at a meeting duly called for that
1208	purpose. Such approval shall be documented by the submission of
1209	a copy of:
1210	(a)  The notice of intent to merge given to the surviving
1211	credit union.
1212	(b)  The notice of the meeting duly called to consider the
1213	merger to the members of the merging credit union. Such notice
1214	shall disclose the purpose of the meeting and the date, time,
1215	and place of the meeting.
1216	(c)  The resolution adopted by the membership confirming
1217	the vote on the merger.
1218
1219	Unless the approval of the merging credit union has been
1220	obtained and proper evidence thereof submitted to the office
1221	within 6 months after the approval by the office, the approval
1222	by the office of the merger and merger plan and agreement shall
1223	be deemed to be revoked and terminated; however, the office on
1224	its own motion, or at the request of the merging or surviving
1225	credit unions for good cause shown, may extend the time for a
1226	period not to exceed 6 months.
1227	(6)  Notwithstanding any other provisions of this chapter
1228	or of chapter 120, a credit union may merge without the vote of
1229	the membership when the office determines that the credit union
1230	is in danger of insolvency or that the credit union is
1231	significantly undercapitalized, as defined in Section 216 of The
1232	Federal Credit Union Act, 12 U.S.C. s. 1790d, and the merger
1233	will enable the credit union to avoid liquidation.
1234	(7)  A merger with a resulting state credit union may not
1235	take place or be effective unless approved by the National
1236	Credit Union Administration and the office issues a certificate
1237	of merger. Upon consummation of the merger, the certificate of
1238	authorization of the merged credit union shall be returned to
1239	the proper authority to be canceled. Also, at consummation, all
1240	property and property rights of, and members' interest in, the
1241	merged credit union shall vest in the surviving credit union
1242	without deed, endorsement, or other instrument of transfer and
1243	all debts, obligations, and liabilities of the merged credit
1244	union shall be assumed by the surviving credit union under the
1245	certificate of authorization under which the merger was
1246	effected. All members of the surviving credit union have the
1247	same rights, privileges, and responsibilities after the merger
1248	is completed. The certificate of merger must be recorded in the
1249	public records of all counties in which the merging credit union
1250	owned any real property at the effective date of the merger.
1251	Section 28.  Section 657.066, Florida Statutes, is amended
1252	to read:
1253	657.066  Conversion from state credit union to federal
1254	credit union and conversely.--Any credit union organized under
1255	this chapter may convert into a federal credit union and any
1256	federal credit union may convert into a credit union organized
1257	pursuant to this chapter upon approval of the authority under
1258	the supervision of which the converted credit union will operate
1259	and upon compliance with applicable laws.
1260	(1)  Any action by the board of directors proposing
1261	conversion shall be by resolution and shall require the
1262	affirmative vote of an absolute majority of the board of
1263	directors. Upon adoption of a resolution relating to conversion,
1264	a copy of the resolution shall be mailed to each member,
1265	together with a notice setting forth the time, location, and
1266	purpose of a meeting of the membership which shall be held not
1267	less than 10 nor more than 30 days following the mailing of the
1268	notice.
1269	(2)  A ballot allowing an affirmative or negative vote on
1270	the proposed conversion shall also be mailed to each member. Any
1271	ballot received by the credit union prior to the meeting called
1272	to consider the conversion shall be counted along with the votes
1273	cast at the meeting. Each member shall have but one vote. A
1274	majority of the votes cast by the members shall be required to
1275	approve the conversion.
1276	(2)(3)  Within 10 days after the approval of the
1277	membership, The board of directors shall cause to be transmitted
1278	to the authority under the supervision of which the converted
1279	credit union will operate a copy of the resolution adopted by
1280	the board of directors and a conversion application approved by
1281	the membership.
1282	(3)(4)  Upon the written approval of the authority under
1283	the supervision of which the converting credit union is to
1284	operate, the converting credit union shall become a credit union
1285	under this chapter or under the laws of the United States, as
1286	the case may be, and thereupon all assets shall become the
1287	property of the converted credit union, subject to all existing
1288	liabilities against the credit union. All shares and deposits
1289	shall remain intact. Any federal credit union seeking to convert
1290	to a state-chartered credit union shall pay a nonrefundable
1291	filing fee of $500. The office may conduct an examination of any
1292	converting federal credit union before approving the conversion
1293	and the converting credit union shall pay a nonrefundable
1294	examination fee as provided in s. 655.411(1)(b).
1295	(4)  Upon the approval of the authority under the
1296	supervision of which the converted credit union will operate, a
1297	copy of the resolution shall be provided to each member,
1298	together with a notice setting forth the time, location, and
1299	purpose of a meeting of the membership which shall be held not
1300	less than 10 or more that 30 days following the transmission of
1301	the notice.
1302	(5)  A ballot allowing an affirmative or negative vote on
1303	the proposed conversion shall also be provided to each member.
1304	Any ballot received by the credit union prior to the meeting
1305	called to consider the conversion shall be counted along with
1306	the votes cast at the meeting. Each member shall have only a
1307	single vote. A majority of the votes cast by the members shall
1308	be required to approve the conversion.
1309	(6)  Within 10 days after the approval by the membership,
1310	the board of directors shall cause to be transmitted to the
1311	authority under the supervision of which the converted credit
1312	union will operate a copy of the resolution adopted by the board
1313	of directors and approved by the membership with confirmation of
1314	the vote.
1315	(7)(5)  Every conversion must be completed within 90 days
1316	after the approval of the authority under the supervision of
1317	which the converted credit union will operate. Upon receiving
1318	its certificate of authorization or charter from the authority
1319	under the supervision of which the converted credit union will
1320	operate, the old certificate of authorization or charter shall
1321	be returned to the proper authority and shall be canceled.
1322	(8)(6)  In consummation of the conversion, the old credit
1323	union may execute, acknowledge, and deliver to the newly
1324	chartered credit union the instruments of transfer necessary to
1325	accomplish the transfer of any property and all right, title,
1326	and interest therein.
1327	Section 29.  Subsection (7) of section 658.43, Florida
1328	Statutes, is amended to read:
1329	658.43  Approval by office; valuation of assets; emergency
1330	action.--
1331	(7)  Notwithstanding any other provisions of the financial
1332	institutions codes or of chapter 120, if the office or the
1333	appropriate federal regulatory agency finds that immediate
1334	action is necessary in order to prevent the probable failure of
1335	one or more banks, associations, or trust companies, which in
1336	this subsection may be referred to as a "failing financial
1337	entity," the office shall have the power, with the concurrence
1338	of the appropriate federal regulatory agency in the case of any
1339	bank or association the deposits of which are insured by the
1340	Federal Deposit Insurance Corporation, to issue an emergency
1341	order authorizing:
1342	(a)  The merger of any such failing financial entity with a
1343	state bank;
1344	(b)  The merger of any such failing financial entity with a
1345	state trust company;
1346	(c)  Any state bank to acquire assets and assume
1347	liabilities of any such failing financial entity, including all
1348	rights, powers, and responsibilities as fiduciary in instances
1349	where the failing financial institution is actively engaged in
1350	the exercise of trust powers;
1351	(d)  Any state trust company to acquire assets and assume
1352	liabilities of any such failing trust company and rights,
1353	powers, and responsibilities as fiduciary of such failing trust
1354	company;
1355	(e)  The conversion of any such failing financial entity
1356	into a state bank or trust company;
1357	(f)  The chartering of a new state bank or state
1358	association to acquire assets and assume liabilities of any such
1359	failing financial entity and to assume rights, powers, and
1360	responsibilities as fiduciary in cases where such failing
1361	financial entity is engaged in the exercise of trust powers; or
1362	(g)  The chartering of a new state trust company to acquire
1363	assets and assume liabilities and rights, powers, and
1364	responsibilities as fiduciary of such failing trust company.
1365
1366	Any such finding by the office shall be based upon reports
1367	furnished to it by a state bank, association, or trust company
1368	examiner or by a federal bank or association examiner or upon
1369	other evidence from which it is reasonable to conclude that any
1370	such bank, association, or trust company is insolvent or is
1371	threatened with imminent insolvency. The office may disallow
1372	illegally obtained currency, monetary instruments, funds, or
1373	other financial resources from the capitalization requirements
1374	of this section. The stockholders of a failing bank,
1375	association, or trust company that is acquired by another bank
1376	or trust company pursuant to this subsection shall be entitled
1377	to the same procedural rights and to compensation for the
1378	remaining value of their shares as is provided for dissenters in
1379	s. 658.44, except that they shall have no right to vote against
1380	the transaction. Any transaction authorized by this subsection
1381	may be accomplished through the organization of a successor
1382	institution.
1383	Section 30.  Sections 657.0315, 657.051, 657.055, and
1384	657.068, Florida Statutes, are repealed.
1385	Section 31.  This act shall take effect July 1, 2005.

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