Sec. 36a-435. (Formerly Sec. 36-194). Definitions. As used in sections 36a-435 to 36a-475, inclusive, unless the context otherwise requires:
(1) "Certificate of organization" means the certificate of incorporation of a Connecticut credit union and includes in the case of Connecticut credit unions in existence on July 1, 1975, articles of association, articles of incorporation and certificates of organization;
(2) "Fiscal year" means January first to December thirty-first, inclusive;
(3) "Immediate family" means any person related by blood, adoption or marriage to a person within the field of membership of the Connecticut credit union;
(4) "Member" means any person who has been admitted to membership in the Connecticut credit union in accordance with its bylaws;
(5) "Membership share" means a share, having a par value not exceeding one hundred dollars, which is part of the capital of the Connecticut credit union and which may not be withdrawn or transferred except upon termination of membership;
(6) "Multiple common bond membership" means a field of membership consisting of more than one group, each of which has, within the group, a common bond of occupation or association;
(7) "Share" means the basic unit of the capital of the Connecticut credit union; and
(8) "Single common bond membership" means a field of membership consisting of one group that has a common bond of occupation or association.
(1949 Rev., S. 5908; P.A. 75-518, S. 1, 13; P.A. 79-112; P.A. 84-125, S. 1; P.A. 85-210, S. 1; 85-415, S. 1; P.A. 87- 9, S. 2, 3; 87-23, S. 1; P.A. 92-12, S. 60; P.A. 94-122, S. 190, 340; P.A. 99-22, S. 2, 8; 99-36, S. 5.)
History: P.A. 75-518 redefined "credit union", formerly defined as corporation without capital stock organized under state law which accumulates payments on shares from members and makes loans to members, defined "certificate of organization" and "member" and redefined "share" in accordance with changed definition of "credit union" and omitted definition of "shareholder"; P.A. 79-112 redefined "credit union" to include limitations on membership and defined "immediate family"; P.A. 84-125 added Subsec. (f) defining "membership share"; P.A. 85-210 redefined "immediate family" to delete the requirement that a person live in the same household and added definition of "group having a common bond of occupation or association"; P.A. 85-415 made technical changes and added definitions of "commissioner" and "fiscal year"; (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"); P.A. 87-23 redefined "immediate family"; P.A. 92-12 redesignated Subsecs.; P.A. 94-122 deleted Subdivs. (2) and (3) defining "commissioner" and "credit union", renumbered the remaining Subdivs. and made technical changes, effective January 1, 1995; Sec. 36-194 transferred to Sec. 36a-435 in 1995; P.A. 99-22 added new Subdiv. (6) defining "multiple common bond membership", deleted former Subdiv. (7) re definition of "groups having a common bond of occupation or association", renumbered former Subdiv. (6) as Subdiv. (7) and added new Subdiv. (8) defining "single common bond membership", effective May 12, 1999; P.A. 99-36 made technical changes.
Annotations to former section 36-194:
Cited. 15 CS 45.

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Sec. 36a-436. (Formerly Sec. 36-195). License required. (a) No Connecticut credit union may engage in business in this state until it has obtained a license from the commissioner.
(b) A license to engage in business as a Connecticut credit union shall be issued by the commissioner to an applicant meeting the requirements of section 36a-437. An application for a license or renewal thereof shall be in writing and shall contain such information as the commissioner may require.
(c) A license issued under this section may be revoked by the commissioner for cause in accordance with section 36a-51.
(1949 Rev., S. 5909; 1959, P.A. 376, S. 1; 1967, P.A. 591, S. 4; P.A. 75-518, S. 2, 13; P.A. 85-94, S. 3, 6; 85-415, S. 3; P.A. 94-122, S. 191, 340.)
History: 1959 act established method of determining renewal fee; 1967 act added provision re ten dollar license fee, specifying that twenty-dollar fee applied if license to be issued from July first to December thirty-first; P.A. 75-518 changed wording slightly; P.A. 85-94 eliminated the fixed fees paid for licensing, renewal and examination and eliminated the requirement that licenses be renewed annually; P.A. 85-415 made technical changes, dividing section into Subsecs., and added provisions in Subsec. (b); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-195 transferred to Sec. 36a-436 in 1995.
Annotations to former section 36-195:
The commissioner may seek such information as he might reasonably require to decide whether a license should issue. 14 CS 296.

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Sec. 36a-437. (Formerly Sec. 36-196). Organization. (a) A Connecticut credit union shall be organized under and subject to the provisions of the laws of this state governing corporations without capital stock, provided, in the event of any conflict between the provisions of such laws and sections 36a-435 to 36a-475, inclusive, the provisions of said sections shall control.
(b) Seven or more persons eighteen years of age or older may form a Connecticut credit union by signing and acknowledging before an officer authorized to take acknowledgments of deeds three copies of a certificate of organization and two copies of the proposed bylaws of the Connecticut credit union. At the incorporators' request, the commissioner shall supply forms for the certificate of organization and bylaws.
(c) Three copies of the certificate of organization, acknowledged in the manner provided in this section, shall be filed with the commissioner. The certificate of organization shall contain the following: (1) The name of the Connecticut credit union which shall include the words "credit union" and "Inc." or the words "mutual benefit association"; (2) a statement that the object of the Connecticut credit union is to conduct the business of, and to engage in any act or activity lawful for, a Connecticut credit union, and that the existence of the Connecticut credit union is perpetual; (3) the location of its principal office and subsidiary offices in this state; (4) a description of its field of membership in detail; (5) any other lawful provisions for the regulation and management of the affairs of the Connecticut credit union or for defining or regulating the powers of the Connecticut credit union, its officers, directors and members as the incorporators or its governing board may deem appropriate; and (6) a statement of the par value of its shares. The certificate of organization of any Connecticut credit union in existence on July 1, 1975, whether denominated a certificate of organization or articles of association or denominated by any other name, shall not, by virtue of the requirements of this subsection, be required to be amended.
(d) Two copies of the bylaws, acknowledged in the manner provided in this section, shall be filed with the commissioner. The bylaws shall contain: (1) The purpose for and the manner in which special meetings of the members shall be held; (2) the title and duties of the officers; (3) the manner in which officers and directors shall be removed and the manner in which vacancies in the officers and governing board shall be filled; (4) the length of terms of officers, the supervisory committee, the credit committee and directors; (5) such other lawful provisions for the regulation and management of the Connecticut credit union affairs as the incorporators or governing board deems appropriate; and (6) any additional provisions not contained in the certificate of organization as the commissioner deems necessary.
(e) (1) Within thirty days from the filing with the commissioner of the certificate of organization and the bylaws, the commissioner shall furnish the incorporators with written notice of the commissioner's determination whether: (A) The proposed field of membership is favorable to the success of the Connecticut credit union; (B) the incorporators are of such character as to give assurance that the affairs of the Connecticut credit union will be administered in accordance with the provisions of sections 36a-435 to 36a-475, inclusive; (C) the certificate of organization meets the requirements of this section; and (D) the proposed bylaws are consistent with the provisions and purposes of sections 36a-435 to 36a-475, inclusive. (2) If the commissioner determines that the foregoing requirements are satisfied, the commissioner shall (A) endorse the commissioner's approval on the copies of the certificate of organization and the bylaws, (B) retain one copy of the certificate of organization and the bylaws, (C) file one copy of the certificate of organization with the Secretary of the State, (D) return one copy of the certificate of organization, certified by the Secretary of the State, and the bylaws to the incorporators, and (E) issue the license.
(f) Within a reasonable time after receipt of notice from the commissioner that the certificate of organization and the bylaws have been approved, the incorporators shall hold an organization meeting at which they shall elect directors, adopt bylaws, and conduct any other business necessary to complete the organization of the Connecticut credit union.
(g) (1) The certificate of organization of a Connecticut credit union may, with the approval of the commissioner, be amended at any time by the adoption of an amendment resolution by two-thirds of the members of the governing board at any meeting. Written notice of such meeting, together with the text of the proposed amendment shall be given to each director at least seven days prior to the meeting. (2) A certificate of amendment shall be filed in triplicate with the commissioner. The certificate of amendment shall set forth: (A) The name of the Connecticut credit union; (B) the amendment; and (C) a statement of the number of directors' votes required to take such action and the number of votes cast in favor of the amendment. (3) The commissioner, upon determining that the certificate of organization, as amended, meets the requirements of sections 36a-435 to 36a-475, inclusive, shall endorse the commissioner's approval thereon, retain one copy, file one copy with the Secretary of the State and return one copy, certified by the Secretary of the State, to the Connecticut credit union.
(h) (1) The bylaws of a Connecticut credit union may, with the approval of the commissioner, be amended at any time by the adoption of an amendment resolution by two-thirds of the members of the governing board at any meeting. Written notice of the meeting and text of the proposed amendment shall be given to each director at least seven days prior to the meeting. (2) The Connecticut credit union shall file two copies of the amendment with the commissioner, who shall determine whether the amendment is consistent with the provisions and purposes of sections 36a-435 to 36a-475, inclusive. Not more than thirty days after the filing of the proposed amendment, the commissioner shall furnish to the Connecticut credit union written notice of the commissioner's determination. The commissioner, upon determining that the bylaws, as amended, satisfy the requirements of said sections, shall endorse the commissioner's approval on two copies of the amendment, retain one copy, and return one copy thereof to the Connecticut credit union. No amendment to the bylaws of a Connecticut credit union may become effective until the amendment has been approved in writing by the commissioner.
(1949 Rev., S. 5910; 1961, P.A. 51; 1963, P.A. 419; 1969, P.A. 184, S. 1; 246, S. 1, 3; 267, S. 1; 268, S. 4; P.A. 73- 330, S. 1, 2; P.A. 75-69, S. 1, 3; 75-518, S. 3−7, 13; P.A. 80-68; P.A. 81-123, S. 1, 4; P.A. 83-306, S. 1, 2; P.A. 84-58, S. 1, 2; 84-65, S. 1, 2; P.A. 85-415, S. 4; P.A. 94-122, S. 192, 340; P.A. 99-36, S. 6.)
History: 1961 act amended Subsec. (4) by providing for amendment of bylaws and articles of association by directors; 1963 act added Subdiv. (b) in Subsec. (1) re central credit union; 1969 acts authorized determination of dividends on daily basis for period during which shares have been fully paid in Subsec. (3), added reference to subsidiary offices and deleted reference to shares in five-dollar multiples in Subsec. (2), deleted reference to twelve per cent per annum interest charged in Subsec. (3), deleted provisions authorizing membership in central credit union of those indebted to dissolved credit union and those who do not own shares of central credit union more than shares owned in dissolved union or minimum shares required for membership in central union, if larger and authorized instead membership of employees of employer employing one hundred or fewer employees as specified in Subsec. (1) and specified that supervisory committee have at least three but not more than five members in Subsec. (3); P.A. 73-330 increased maximum number of employees from one hundred to two hundred fifty and rephrased Subsec. (1)(b); P.A. 75-69 added provisions in Subsec. (1)(b) re divisions of central credit union; P.A. 75-518 essentially rewrote Subsecs. (1) to (4) and added Subsec. (5); P.A. 80-68 rewrote Subsec. (1)(b); P.A. 81-123 amended Subdiv. (b) of Subsec. (1) to allow the central credit union to make certain investments in addition to investments in other central credit unions and investments permitted by chapter 646; P.A. 83-306 amended Subdiv. (b) of Subsec. (1) to allow out-of-state credit unions to become members of the state's central credit union, to allow the central credit union to invest in the debt obligations of corporations incorporated and doing a major portion of their business in the United States provided the debt obligations are in a top rating category and not more than ten per cent of assets are invested in a single corporation, to allow the central credit union to enter into correspondent relationships with other financial institutions, to allow the central credit union to establish subsidiaries to provide services to it or its members, to allow the central credit union to receive and hold deposits and investments of any central liquidity facility authorized by federal law and to specify that loans sold by the central credit union to the central liquidity facility shall not be counted in the central credit union's existing limit on borrowed funds; P.A. 84-58 amended Subdiv. (d) of Subsec. (4) to eliminate the requirement that a credit union file a certified copy of the certificate of organization with the town clerk of each town in which it has a place of business; P.A. 84-65 amended Subdiv. (b) of Subsec. (1) to permit the central credit union to accept equity investments from nonmember financial institutions, to provide custodial or safekeeping services to its members and to borrow funds in an amount not exceeding one hundred per cent of its paid-in and unimpaired capital and surplus; P.A. 85-415 made technical changes, incorporating provisions formerly in Secs. 36-197, 36-202, 36-203 and 36-204 and transferring provisions to Secs. 36-215 and 36-196c; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-196 transferred to Sec. 36a-437 in 1995; P.A. 99-36 made technical changes.
Annotations to former section 36-196:
Cited. 15 CS 45.

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Sec. 36a-438. (Formerly Sec. 36-196a). Field of membership. Expansion. Membership applications. Continuation of membership. Expulsion or withdrawal of member. (a) The membership of a Connecticut credit union is limited to (1) single common bond membership, (2) multiple common bond membership, provided, only a group having fewer than three thousand members at the time the group is first included in the field of membership of the Connecticut credit union shall be eligible to be included in such field of membership, except as provided in subsection (b) of this section or in section 36a-439, (3) persons within a well-defined local community, neighborhood or rural district, and (4) members of the immediate family or household of all persons included under subdivisions (1), (2) and (3) of this subsection. Any person who is a member of any Connecticut credit union on May 12, 1999, may remain a member of such Connecticut credit union after said date. Any person who is a member on May 12, 1999, of any group that constituted all or a part of the field of membership of any Connecticut credit union on said date shall continue to be eligible to become a member of such Connecticut credit union after said date for as long as such person remains a member of such group.
(b) The numerical limitations in subdivision (2) of subsection (a) of this section do not apply to:
(1) Any group that the commissioner determines in writing cannot feasibly or reasonably establish a new Connecticut credit union with a single common bond membership because (A) the group lacks sufficient volunteer and other resources to support the efficient and effective operation of a Connecticut credit union, (B) the group lacks the requirements determined by the commissioner to be necessary for success in establishing and managing a new Connecticut credit union, including, but not limited to, demographic characteristics such as geographical location of members, diversity of ages and income levels, and such other factors as determined by the commissioner that may affect the financial viability and stability of a Connecticut credit union, or (C) the group would be unlikely to operate a safe and sound Connecticut credit union; or
(2) Any group transferred from another credit union in connection with a merger approved pursuant to section 36a-470.
(c) Notwithstanding the provisions of subsection (a) of this section, the commissioner may allow a Connecticut credit union with a multiple common bond membership to include any person within a well-defined local community, neighborhood or rural district if:
(1) The commissioner determines that the well--defined local community, neighborhood or rural district is (A) an investment area as defined in Section 103(16) of the Community Development Banking and Financial Institutions Act of 1994, 12 USC Section 4702(16), and meets any additional requirements that the commissioner may impose; and (B) underserved by other depository institutions, as defined in Section 19(b)(1)(A) of the Federal Reserve Act, 12 USC Section 461(b), based on data of the commissioner and federal supervisory agencies; and
(2) The Connecticut credit union establishes and maintains an office in the well- defined local community, neighborhood or rural district at which credit union services are available.
(d) The commissioner may not approve an amendment to the certificate of organization of a Connecticut credit union to expand its field of membership unless the commissioner determines in writing that (1) the Connecticut credit union has not engaged in any material unsafe or unsound practice during the one-year period preceding the date on which the certificate of amendment is filed with the commissioner, (2) the Connecticut credit union is adequately capitalized, (3) the Connecticut credit union has the administrative capability to serve the proposed membership group and the financial resources to meet the need for additional staff and assets to serve the new membership group, (4) any potential harm that the expansion of the field of membership of the Connecticut credit union may have on any other Connecticut credit union and its members is clearly outweighed in the public interest by the probable beneficial effect of the expansion in meeting the convenience and needs of the members of the group proposed to be included in the field of membership, and (5) the Connecticut credit union has met such additional requirements as the commissioner may prescribe by regulation adopted in accordance with chapter 54.
(e) All applications for membership shall be submitted to the membership officer, if one is appointed as provided in subdivision (5) of subsection (c) of section 36a-450, who shall have authority to approve applications for membership under such conditions as the governing board prescribes. The membership officer shall submit to the governing board at its regular meeting a list of the membership applications approved or received by the membership officer subsequent to the previous report together with any other related information required by the governing board. All membership applications not approved by a membership officer shall be referred to the governing board or to the executive committee if so authorized, for action.
(f) Notwithstanding any change in employment, occupation, residence or other condition initially controlling eligibility for membership in any Connecticut credit union, any person properly admitted to membership in a credit union may continue such person's membership therein during the person's lifetime. A Connecticut credit union may provide for the inclusion of the surviving spouse of a deceased member in its field of membership.
(g) Any Connecticut credit union may provide for the inclusion in its field of membership of any natural person whose loan it has purchased pursuant to subdivision (15) of subsection (a) of section 36a-441.
(h) The governing board may expel any member who has not carried out the member's obligations with the Connecticut credit union or who has neglected or refused to comply with the provisions of sections 36a-435 to 36a-475, inclusive, or the bylaws. No member may be expelled by the governing board until the member has been informed in writing of the charges against the member and has had a reasonable opportunity to be heard thereon. A member desiring to withdraw from a Connecticut credit union shall give notice of the member's intention to withdraw.
(i) A Connecticut credit union may cancel the shares of any member who withdraws or is expelled, applying the value thereof to the member's indebtedness to the Connecticut credit union. A member of a Connecticut credit union who has withdrawn or been expelled shall not be relieved of any liability to the Connecticut credit union. The amounts paid in on shares by such member, together with any dividends credited to the member's shares, shall be repaid to the member in the order of the member's withdrawal or expulsion, as funds become available therefor, except that the Connecticut credit union may deduct from such payments any sums due it from such member.
(1969, P.A. 432, S. 1, 2; P.A. 75-518, S. 8, 13; P.A. 85-210, S. 2; 85-415, S. 5; P.A. 87-23, S. 2; P.A. 90-26, S. 1; P.A. 94-122, S. 193, 340; P.A. 99-22, S. 3, 8; 99-36, S. 7.)
History: P.A. 75-518 deleted "organized under the provisions of this chapter" following "credit union" and "in its bylaws" following "provide"; P.A. 85-210, in conjunction with P.A. 85-415, added provisions to extend membership to persons whose loans have been purchased from other credit unions; P.A. 85-415 made technical changes and incorporated provisions formerly in Secs. 36-194, 36-196a, 36-198, 36-199 and 36-203; P.A. 87-23 amended Subsec. (a) to broaden the membership eligibility of credit unions to include members' immediate families; P.A. 90-26 made a technical change in Subsec. (d) and deleted Subsec. (g) re commission, bonus or finders fee for obtaining new members; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-196a transferred to Sec. 36a-438 in 1995; P.A. 99-22 amended Subsec. (a) by replacing former Subdivs. (1) and (2) with new Subdivs. (1) to (4), inclusive, re single common bond membership, multiple common bond membership, persons within a well-defined local community, neighborhood or rural district, and members of the immediate family or household of such persons, and by adding grandfather provisions, added new Subsecs. (b) to (d), inclusive, re field of membership and expansion thereof, redesignated former Subsecs. (b) to (f), inclusive, as Subsecs. (e) to (i), inclusive, and made technical changes, effective May 12, 1999; P.A. 99-36 made a technical change in Subsec. (e).

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Sec. 36a-439. (Formerly Sec. 36-196c). Change in the field of membership. The commissioner may approve a change in the field of membership of any Connecticut credit union without regard for the common bond or the numerical limitation in subdivision (2) of subsection (a) of section 36a-438, whenever the commissioner determines that a merger with another Connecticut credit union or a federal credit union is not feasible and that continued operation of the Connecticut credit union without the requested change may result in liquidation of the Connecticut credit union.
(P.A. 85-210, S. 3; P.A. 94-122, S. 194, 340; P.A. 99-22, S. 4, 8.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-196c transferred to Sec. 36a-439 in 1995; P.A. 99-22 added provision re the numerical limitation in Sec. 36a-438(a)(2), effective May 12, 1999.

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Sec. 36a-440. (Formerly Sec. 36-196d). Central credit union. (a) A single central credit union may be organized and operated as a Connecticut credit union under the provisions of sections 36a-435 to 36a-475, inclusive, and shall be subject to the provisions of said sections which are not inconsistent with this section. The central credit union organized and operated under the provisions of this section shall in all respects be a Connecticut credit union as defined by sections 36a-435 to 36a-475, inclusive. The bylaws of the central credit union shall contain such provisions as are necessary to permit and promote accomplishment of its unique purposes.
(b) The membership of the central credit union shall be limited to Connecticut credit unions, federal credit unions and out-of-state credit unions, organizations and associations of any such member credit unions, including organizations and associations of officers, directors or managers of any such member credit unions, and subsidiaries of such organizations and associations. Membership in the central credit union shall terminate when the member is no longer within the field of membership.
(c) Annual meetings may be held at such time as the bylaws provide. Each member of the central credit union shall be entitled to a single vote on all matters referred to the members for vote. Members shall be represented at any meeting of members of the central credit union by one member of such member credit union who has been authorized by the governing board of such member credit union. Only the member so authorized may cast the vote of its member credit union at such meetings.
(d) (1) Any officer, director, employee or supervisory or credit committee member of any member and any employee of the central credit union may serve as an officer, director, or committee member of the central credit union subject to any additional criteria imposed by the bylaws. (2) The governing board of the central credit union shall meet at least quarterly. The governing board may delegate to an executive committee of at least three directors such of its duties and authorities between meetings of the governing board as it deems appropriate. The governing board shall establish policies and procedures dealing with loans to members, the terms on which investments of members in the central credit union will be accepted, the borrowing of funds by the central credit union, and investment by the central credit union of its funds. The governing board shall commit the implementation of such policies and procedures to designated officials of the central credit union. (3) The governing board of the central credit union shall appoint a five-member supervisory committee, no member of which may simultaneously serve on the credit committee or as an officer or employee of the central credit union and only two of whom may simultaneously serve as directors of the central credit union.
(e) (1) The central credit union may invest its surplus funds in: (A) Certificates of deposit; (B) the debt obligations of banks and bank holding companies; (C) the debt obligations of corporations incorporated and doing a major portion of their business within the United States, provided, (i) such corporate debt obligations are in the top rating category of any rating service recognized by the commissioner and (ii) not more than ten per cent of the central credit union's assets shall be invested in any one such corporation; (D) investments legal for Connecticut banks; (E) any other investment securities approved by the commissioner; (F) any central credit union organized under any other law; (G) repurchase transactions involving any investments which are permitted for the central credit union. For purposes of this subparagraph, a repurchase transaction is any transaction in which the central credit union agrees to buy or sell a permitted investment and simultaneously agrees to sell or buy the same investment at a later date; (H) a participating interest in any part or all of the outstanding loans of any other Connecticut credit union, federal credit union or out-of-state credit union; and (I) other investments permitted by sections 36a-435 to 36a-475, inclusive. The central credit union may purchase from any Connecticut credit union, federal credit union or out-of-state credit union, any loans which were legal for the selling credit union at the time made or acquired, and may hold or resell any such loans, in whole or in part, with or without undertaking direct primary liability for payment of the principal and interest of any of such loans which may go into default, provided, if any such loans are secured by real property, such property shall be located in this state. (2) The central credit union may accept equity investments from nonmember financial institutions on the following terms and conditions: (A) The equity investments shall be a part of the equity capital of the central credit union, but shall not be deemed to be shares of or a part of the share capital of the central credit union; (B) the investments shall not confer any of the rights and privileges of membership in the central credit union on the owners; and (C) the equity investments by nonmembers shall not exceed in the aggregate ten per cent of the assets of the central credit union.
(f) Loans to members shall, notwithstanding the location of their places of business, be made under the authority and subject to the limitations of subdivision (8) of subsection (a) of section 36a-441. Loans sold by the central credit union to the central liquidity facility or securities sold subject to repurchase shall not be treated as funds borrowed by the central credit union, notwithstanding the recourse rights or repurchase liability inherent in such transactions. The central credit union shall have a lien and right of set- off against the investment of any member for any loan or other liability of such member to the central credit union at any time existing. The central credit union may provide custodial or safekeeping services to its members for securities owned by them.
(g) (1) The central credit union may: (A) Borrow funds in an amount not exceeding one hundred per cent of its paid-in and unimpaired capital and surplus, (B) become the agent member for this state in any central liquidity facility for credit unions authorized by federal law, (C) invest in such a central liquidity facility for such amount as may be required in order to secure for the central credit union and its members full participation in the functions of that facility, (D) receive and hold deposits or investments of such facility, (E) enter into correspondent relationships with other financial institutions and establish and maintain with such other institutions any accounts which are normally required as part of the correspondent relationship, (F) establish and maintain one or more subsidiaries to provide services which are necessary or convenient to the conduct of its business or that of its members, (G) receive from members investments, including payment on shares, with varying maturities and dividend rates established pursuant to policies and procedures of the governing board, and (H) issue money orders and travelers checks and sell them through its members. (2) The central credit union shall contribute to reserves, in lieu of the requirements of section 36a-458, (A) an amount equal to two per cent of gross income, excluding any gross receipts from any transaction in which the central credit union acts only as representative, agent or intermediary for any other party or parties to that transaction until such time as the commissioner may determine that additions to the reserve shall be reduced or suspended, or (B) such greater amount as may be required by the National Credit Union Administration or any other federal regulatory agency exercising jurisdiction over the central credit union.
(h) In the event of liquidation of the central credit union, the assets of the central credit union or the proceeds from any disposition of the assets shall be applied and distributed in the following sequence: (1) All fees and assessments due the commissioner; (2) secured creditors up to the value of their collateral; (3) costs and expenses of liquidation; (4) wages due the employees of the central credit union; (5) costs and expenses incurred by creditors in successfully opposing the release of the central credit union from certain debts as allowed by the commissioner; (6) taxes owed to the United States or any other governmental unit; (7) debts owed to the United States; (8) general creditors and secured creditors to the extent their claims exceed the value of their collateral; and (9) members, to the extent of uninsured share accounts, and the organization that insured the share accounts of the central credit union.
(i) The commissioner may adopt such regulations, in accordance with chapter 54, and may prescribe such operating procedures, consistent with the provisions of this section, as the commissioner deems advisable for the supervision and regulation of the operations of the central credit union.
(P.A. 85-415, S. 34; P.A. 86-139, S. 1, 2; P.A. 88-81, S. 1, 2; P.A. 90-26, S. 2; P.A. 91-108, S. 1, 3; P.A. 92-89, S. 3, 20; P.A. 93-61; P.A. 94-122, S. 195, 340; P.A. 99-36, S. 8.)
History: P.A. 86-139 amended section to eliminate separation of central credit union into member credit union division and individual member division; P.A. 88-81 amended Subsec. (d) by adding a new Subdiv. (3) re the appointment of a five member supervisory committee, amended Subsec. (e) by adding a new Subpara. (G) concerning repurchase transactions and a new Subpara. (H) concerning the purchase of certain loans, amended Subsec. (g) by relettering the Subparas. and adding a new Subpara. (G) concerning the receipt of member's investments, and added a new Subsec. (h) re the procedures for the liquidation of the central credit union, relettering former Subsec. (h) as (i); P.A. 90-26 made a technical change in Subsec. (f); P.A. 91-108 amended Subsec. (g) by authorizing the central credit union to issue money orders and travelers checks and sell them through its members; P.A. 92-89 amended Subsec. (h) to insert new Subdiv. (1) providing that all fees and assessments due the commissioner shall be first in order of priority in the event of liquidation and distribution of assets and renumbered existing Subdivs. accordingly; P.A. 93-61 amended Subsec. (e) by adding a new Subpara. (H) re the investment of surplus funds by the central credit union in any part or all of the outstanding loans of any other credit union organized under the laws of this state, any other state or under the federal Credit Union Act and relettered the former Subpara. (H) as (I); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-196d transferred to Sec. 36a- 440 in 1995; P.A. 99-36 made technical changes.

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Sec. 36a-441. (Formerly Sec. 36-198). Powers. (a) A Connecticut credit union may, subject to the restrictions and limitations of sections 36a-435 to 36a-475, inclusive, and its bylaws:
(1) Issue shares to its members and receive payments on shares, reduce the amount of its members' shares and cancel shares as provided in sections 36a-435 to 36a-475, inclusive, including (A) club shares to be withdrawn within fifteen months and on which no dividends need be paid and (B) membership shares, if the bylaws so provide, on which no dividends need be paid;
(2) Make unsecured and secured loans in the manner provided in section 36a-456;
(3) Contract for loan protection insurance on the lives of its borrowing members and for life savings insurance on its members' shares;
(4) Deposit its funds in financial institutions whose accounts are insured by or under a program operated by an agency or instrumentality of the United States, provided not more than ten per cent of its assets may be deposited in financial institutions whose principal offices are located in any other state;
(5) Invest its funds in bonds legal as investments for Connecticut banks under the provisions of section 36a-275 subject to the limitations contained in section 36a-452;
(6) Sell or issue to its members without charge negotiable checks or drafts drawn by or on it and payable by it or through any bank accepting commercial deposits, provided the Connecticut credit union shall give the commissioner prior written notification of its intention to issue and sell such negotiable checks or drafts;
(7) Borrow money to an amount not exceeding fifty per cent of the paid-in and unimpaired capital and surplus of the Connecticut credit union. A Connecticut credit union shall notify the commissioner in writing of its intention to borrow amounts in excess of an aggregate of thirty-five per cent of its paid-in and unimpaired capital and surplus;
(8) Make loans not exceeding twenty per cent of the lending Connecticut credit union's paid-in and unimpaired capital and surplus to any other Connecticut credit union and any federal credit union;
(9) Expel members, as provided in sections 36a-435 to 36a-475, inclusive;
(10) Acquire, improve, hold, alter, maintain, repair, encumber and convey such real property as may be necessary for the transaction of its business including the safekeeping and protection of its assets. No Connecticut credit union may expend in the purchase or construction of any building for the purpose, in whole or in part, of accommodating its business, a greater amount than, in the opinion of the commissioner, should be used for such purpose, and such expenditure shall be subject to the approval of the commissioner;
(11) Make home or property improvement loans as provided in section 36a-456;
(12) Make higher education loans as provided in sections 36a-435 to 36a-475, inclusive;
(13) Make loans secured by mortgage on real property, including home equity loans, as provided in sections 36a-265 and 36a-442;
(14) Make contributions or gifts for charitable, educational or public welfare purposes, except that the total amount of such contributions or gifts made by any Connecticut credit union in any one fiscal year shall not exceed the greater of: (A) One hundred dollars, (B) one and one-half per cent of its undivided earnings, or (C) one-tenth of one per cent of its gross income in the immediately preceding fiscal year;
(15) Sell any or all of its outstanding loans to any other lending institution and to purchase one or more outstanding loans from any other Connecticut credit union or federal credit union or purchase from any other lending institution residential mortgage loans or consumer loans made to the credit union's members on a recourse or without recourse basis for such consideration as shall be agreed upon. A loan servicing agreement or arrangement contemplated by such a transaction shall be subject to the prior approval of the commissioner;
(16) Sell a participating interest in any or all of its outstanding loans to and purchase a participating interest in any or all of the outstanding loans of any bank, Connecticut credit union, federal credit union or credit union service organization, as defined in section 36a-475, pursuant to an appropriate written loan participation and servicing agreement to be signed by all parties involved in such transaction, provided such agreement shall be subject to the prior approval of the commissioner;
(17) Act as agent for the sale, issue and redemption of the obligations of the United States and pledge assets to the United States or to the proper federal reserve bank for its obligations as such agent;
(18) Subject to the prior approval of the commissioner, install safe deposit boxes within suitably constructed vaults in its business building or buildings and rent the boxes to its members provided the Connecticut credit union has assets of at least five hundred thousand dollars and at least one full-time employee;
(19) Act as agent for the sale to its members of money orders and travelers checks issued by the central credit union;
(20) Transact a general credit union business and exercise by its governing board or duly authorized officers or agents, subject to applicable law, all such incidental powers as are necessary thereto. The express powers authorized for a Connecticut credit union under this subsection do not preclude the existence of additional powers deemed to be incidental to the transaction of a general credit union business pursuant to this subsection; and
(21) Engage in any activity that a federal credit union may be authorized to engage in under federal law, provided the Connecticut credit union shall file with the commissioner prior written notice of its intention to engage in such activity. Such notice shall include a description of the activity, a description of the financial impact of the activity on the Connecticut credit union, citation of the legal authority to engage in the activity under federal law, a description of any limitations or restrictions imposed on such activity under federal law, and any other information that the commissioner may require. The Connecticut credit union may begin engaging in such activity unless the commissioner disapproves such activity not later than thirty days after the notice is filed. The commissioner may adopt regulations in accordance with chapter 54 to ensure that any such activity is conducted in a safe and sound manner with adequate consumer protections. The provisions of this subdivision do not authorize a Connecticut credit union or a subsidiary of a Connecticut credit union to sell title insurance.
(b) No person, partnership, association or corporation may receive payments on shares or make loans therefrom in the manner of a Connecticut credit union or transact business under any name or title containing the words "credit union" or "mutual benefit association" or any variation or combination of such words unless exempt under section 36a-474 or unless licensed by the commissioner pursuant to the provisions of section 36a-436. Any association of Connecticut credit unions may use the words "credit union" or "mutual benefit association" as part of the name of such association, and any credit union service organization approved by the commissioner pursuant to subsection (c) of section 36a-475 may use the words "credit union" as part of the name of such credit union service organization.
(1949 Rev., S. 5911; 1951, 1953, 1955, S. 2741d; 1957, P.A. 108; 111; 1959, P.A. 72, S. 1; 1961, P.A. 127; 204; 1963, P.A. 183; 1967, P.A. 133, S. 1; 143; 322; 369, S. 1; 563, S. 1, 3; 1969, P.A. 234, S. 1, 2; 267, S. 2; 1971, P.A. 342, S. 1; 721; P.A. 73-126; 73-321, S. 1, 2; 73-326, S. 1, 2; 73-360, S. 1, 3; P.A. 75-57; 75-58, S. 1, 2; 75-61, S. 1, 2; 75-119, S. 1, 2; P.A. 77-96; 77-127; 77-136; 77-179, S. 2; 77-189, S. 1, 2; 77-614, S. 161, 610; P.A. 78-121, S. 69, 113; 78-331, S. 16, 58; P.A. 79-233, S. 4; P.A. 82-109, S. 1, 6; 82-171, S. 1, 2; P.A. 83-296, S. 1−3; 83-331, S. 2; P.A. 84-93, S. 2, 3; 84-125, S. 2; P.A. 85-79; 85-415, S. 6; P.A. 88-65, S. 59; P.A. 89-76, S. 1, 2; P.A. 90-26, S. 3; P.A. 91-108, S. 2, 3; P.A. 92-12, S. 61; P.A. 94-122, S. 196, 340; P.A. 95-253, S. 9; P.A. 96-53, S. 1, 4; P.A. 99-19; 99-36, S. 9; P.A. 00-38.)
History: 1959 act amended Subsec. (g)(2) by inserting "or accounts" and provision re insurance by federal agency, and by deleting requirement that association be located in state; 1961 acts set maximum term of loans (Subsec. (d)) at 5 years (formerly 3) and added Subsec. (m); 1963 act specifically referred to "short term" shares and substituted "withdrawn" for "repurchased" in Subdiv. (a); 1967 acts added Subdivs. (n) to (p) authorizing investment in stock, bonds, etc. of corporation performing service necessary to the investing credit union, specified authority to invest in accounts of "federal and state chartered" associations insured by Federal Savings and Loan Insurance Corporation located in the state and authorized investments in such associations outside the state to the extent that accounts are insured in Subdiv. (g) and added exception re five year maturity period in Subdiv. (d); 1969 acts made five-year maturity period applicable to unsecured loans, allowed ten-year period for secured loans and specified what is deemed security in Subdiv. (d), raised limits to be borrowed from twenty and forty per cent of capital and surplus to twenty-five and fifty per cent in Subdiv. (h) and added provision re investments of central credit union in Subdiv. (g); 1971 acts allowed payment in quarterly instalments in Subdiv. (d), specifying that loans secured by pledge of shares may be made for one year or less without regard to instalment repayment provision and authorizing use of share accounts in credit unions as security accordingly; P.A. 73-126 authorized semiannual instalments in Subsec. (d); P.A. 73-321 increased twenty-five per cent borrowing limit to thirty-five per cent in Subdiv. (h); P.A. 73-326 added Subdiv. (q); P.A. 73-360 repealed Subdiv. (c) which had allowed credit union to charge subscribers an entrance fee for shares; P.A. 75-57 increased maturity periods in Subdiv. (d) by five years each; P.A. 75-58 and P.A. 75-61 added Subdivs. (r) and (s); P.A. 75-119 rephrased Subsec. (h) so that fifty per cent may be borrowed if commissioner is notified of credit union's intent to do so where previously commissioner's prior approval was necessary in Subdiv. (h); P.A. 77-96 added Subdiv. (t); P.A. 77-127 replaced provision in Subdiv. (f) authorizing deposits in state banks and trust companies, national banking associations and mutual savings banks within the state or in towns outside state within twenty- five miles of the credit union; P.A. 77-136 added Subdiv. (u); P.A. 77-179 essentially rephrased section; P.A. 77-189 added proviso in Subdiv. (g)(5); P.A. 77-614 replaced bank commissioner with banking commissioner, effective January 1, 1979; P.A. 78-121 referred to savings and loan associations rather than to "building or" savings and loan associations in Subdiv. (g)(2); P.A. 78-331 made technical correction in Subdiv. (t), changing commissioner's name as called for in P.A. 77-614; P.A. 79-233 clarified investments in bonds under Subdiv. (g)(1), previously such investments were in bonds legal as investments for savings banks "according to the requirements of the statutes applicable thereto"; P.A. 82-109 amended Subsec. (d) by deleting the requirement that loans be repaid in "substantially equal" instalments; P.A. 82-171 amended Subsec. (g) by adding Subdiv. (6) authorizing investments in cooperatives; P.A. 83-296 amended Subsec. (d) to delete maximum maturities of ten years for unsecured loans and fifteen years for secured loans and allow the credit union board of directors to decide such maturities and amended Subsec. (g) to allow investments in one or more organizations rather than corporations, eliminated restriction against investing more than necessary to obtain necessary services, required written notice of such investment to the commissioner within ten days of the investment rather than prior approval of the commissioner, allowed investment of up to five per cent of capital and surplus in the debt obligations of banks which obligations have maturities of one week or less, and increased the limit on investments in accounts of other credit unions from forty thousand dollars to the maximum amount to which the share account may be insured; P.A. 83-331 added Subsec. (v) concerning the receipt of public funds by a credit union; P.A. 84-93 amended Subsec. (d) to permit secondary mortgages on real property whose net equity value is at least twenty per cent of appraised value to be deemed security for secured and unsecured loans; P.A. 84-125 amended Subsec. (a) to authorize the issuance of membership shares to members; P.A. 85-79 would have amended Subsec. (g) to allow investment by credit unions in the central credit union but did not take effect, P.A. 85-415 having been given precedence, but see Sec. 36-203d; P.A. 85-415 made technical changes, incorporating provisions formerly in Secs. 36-201 and 36-223 and transferring provisions to Secs. 36-200, 36-203d and 36-206; P.A. 88-65 substituted a reference to Sec. 36-224 for references to Sec. 36-223d; P.A. 89-76 amended Subdiv. (7) of Subsec. (a) to authorize a credit union to issue checks without charge to its members and to process checks; P.A. 90-26 amended Subsec. (a) by changing short term shares to club shares and including the power to receive payments on shares, reduce the amount of member's shares and cancel shares in Subdiv. (1), deleting Subdivs. (2) and (11) and renumbering the remaining Subdivs., and requiring notice to the commissioner of banking prior to issuing and selling negotiable checks or drafts; P.A. 91-108 amended Subsec. (a) by adding Subdiv. (19) authorizing credit unions to act as agents for the sale to members of money orders and travelers checks issued by the central credit union; P.A. 92-12 made technical changes in Subdiv. (5) of Subsec. (a); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-198 transferred to Sec. 36a-441 in 1995; P.A. 95-253 amended Subsec. (b) to permit a credit union service organization to use "credit union" in its name; P.A. 96-53 amended Subdiv. (a)(13) to include home equity loans and amended Subdiv. (a)(15) to let credit unions purchase loans made to their members, effective May 7, 1996; (Revisor's note: In 1999 the word "section" immediately preceding a reference to "subsection (c) of section 36a-475" in Subsec. (b) was deleted editorially to correct a clerical error); P.A. 99-19 amended Subsec. (a) by adding provisions in Subdiv. (16) re sale of loan participation interests to and purchase of loan participation interests from banks, Connecticut credit unions, federal credit unions or credit union service organizations and adding new Subdiv. (20) re incidental powers; P.A. 99-36 made technical changes in Subsec. (a); P.A. 00-38 amended Subsec. (a) by adding Subdiv. (21) re parity of Connecticut credit unions with federal credit unions.
Annotations to former section 36-198:
Does not prohibit imposition of expenses of collection or fine in event of default. 141 C. 301.

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Sec. 36a-442. (Formerly Sec. 36-198b). Mortgage loans to members. (a) Subject to the requirements of this section, a Connecticut credit union may make loans to members secured by mortgages on real property located in this state, or a city or town of any adjoining state, provided that the city or town is within twenty-five miles of the office of such Connecticut credit union. The mileage limitation imposed by this subsection shall not apply to loans secured by the primary residence of the member.
(b) A certificate of title issued by a person approved by the Connecticut credit union, or a policy of title insurance, shall be filed with the lending Connecticut credit union until the loan is paid.
(c) Before a loan is granted, the real property shall be appraised by one or more persons, to be designated by the credit committee of the Connecticut credit union making the loan, who are familiar with real property values in the community where the real property is located. The appraisals shall be in writing, state the amount at which the property has been appraised and be filed with the lending Connecticut credit union until the loan is paid.
(d) The total amount of all loans secured by mortgages of real property shall not exceed eighty per cent of the Connecticut credit union's paid-in and unimpaired capital and surplus.
(e) A mortgage loan shall be subject to the following limitations: (1) A mortgage loan made by a Connecticut credit union with assets of less than two million dollars may not exceed in amount ninety per cent of the net equity value of the real property and shall be payable in full within twenty years from the date of its making. For the purpose of this subsection, the net equity value of real property is the appraised value determined pursuant to subsection (c) of this section, reduced by the value of any prior liens or encumbrances with the exception of leases, easements and reservations to the United States of fissionable materials. (2) A mortgage loan made by a Connecticut credit union with assets of two million dollars or more may not exceed the limitations of subdivision (1) of this subsection, or in the alternative, such loan shall not exceed in amount eighty per cent of the net equity value of the real property and shall be payable in full within forty years from the date of its making.
(f) The following mortgage loans may be made without regard to the loan-to-value limits set forth in subsection (e) of this section or in subdivision (5) of subsection (f) of section 36a-456:
(1) Loans guaranteed or insured by the United States government or its agencies, provided the amount of the guaranty or insurance is at least equal to the portion of the loan that exceeds the applicable loan-to-value limit;
(2) Loans backed by the full faith and credit of a state government, provided the amount of the assurance is at least equal to the portion of the loan that exceeds the applicable loan-to-value limit;
(3) Loans guaranteed or insured by a state, municipal or local government, or its agency, provided (A) the amount of the guaranty or insurance is at least equal to the portion of the loan that exceeds the applicable loan-to-value limit and (B) the Connecticut credit union has determined that the guarantor or insurer has the financial capacity and willingness to perform under the terms of the guaranty or insurance agreement;
(4) Loans that are renewed, refinanced or restructured without the advancement of new funds or an increase in a line of credit, except for reasonable closing costs;
(5) Loans that are renewed, refinanced or restructured in connection with workout situations involving existing loans from the Connecticut credit union to its members, either with or without the advancement of new funds, where such action is consistent with safe and sound lending practices and is a part of a clearly defined and well documented program to achieve orderly liquidation of the debt, reduce risk of loss or maximize recovery of the loan;
(6) Loans that facilitate the sale of real estate acquired by the Connecticut credit union in the ordinary course of collecting a debt previously contracted in good faith;
(7) Loans where all or part of such loan is made in primary reliance upon the mortgage insurance policy of a private mortgage guaranty company, licensed by the Insurance Commissioner to do business in this state and approved by the commissioner;
(8) With prior notice to the commissioner, unless the commissioner disapproves within thirty days after receipt of such notice, residential mortgage and consumer loan programs for members which are determined by the governing board of the Connecticut credit union or by a management committee or board committee appropriately designated by such governing board, to be prudent under the circumstances after consideration of the relevant underwriting risks, provided (A) the aggregate amount of all such loans, calculated at the time of origination of each such loan, does not exceed eighty per cent of the Connecticut credit union's paid-in and unimpaired capital and surplus, (B) the aggregate amount of all such loans, calculated at the time of origination of each such loan, does not exceed thirty per cent of the Connecticut credit union's equity capital and reserves for loan and lease losses, and (C) the Connecticut credit union makes a notation of such determination and the reasons therefor in the applicable loan file. A loan which is included within the aggregate limits of this subdivision may subsequently be excluded if the applicable loan-to-value limit is satisfied because of a reduction in principal or senior liens, additional contribution of real estate collateral or increases in equity value substantiated by a current suitable appraisal.
(g) Every note evidencing a loan secured by a mortgage shall require consecutive weekly, semimonthly or monthly payments.
(h) In the case of a Connecticut credit union making loans secured by a mortgage under the limitation of subdivision (2) of subsection (e) of this section, such loans may be made for the construction or repair of buildings or other improvements on the property of the borrower and secured by a mortgage thereon and may be made in installments advanced at the discretion of the Connecticut credit union as the work progresses. At no time may the ratio of the amount of the loans to the then total value of the mortgaged premises exceed fifty per cent or the ratio the final loan is to bear to the value of the completed mortgaged premises, whichever is greater. The loan may provide for the payment of interest only during the period provided in the mortgage deed for the completion thereof and the term provided for repayment in full of such loan may be extended by the same period.
(i) Any Connecticut credit union may, in connection with any mortgage loan made by it, contract with the mortgagor for interest to be paid currently or to accrue. If the interest is to accrue, it shall be added to the mortgage debt on which the interest may be charged and collected. Such accrued interest shall be secured by the mortgage to the same extent as the principal of the mortgage debt.
(j) Attorney fees in connection with any mortgage loan made by a Connecticut credit union, including preparation of the mortgage deed and note, title search, waivers and closing fees or recording fees, shall be paid by the borrower unless otherwise determined by the Connecticut credit union.
(1967, P.A. 563, S. 2; 1971, P.A. 405, S. 1; P.A. 73-270, S. 1−3; P.A. 75-107, S. 1−3; 75-121, S. 1, 2; P.A. 77-95; 77- 179, S. 19; P.A. 79-130, S. 1, 2; P.A. 81-391, S. 6; P.A. 84-93, S. 1, 3; P.A. 85-415, S. 20; P.A. 87-9, S. 2, 3; P.A. 88-46; 88-65, S. 58; P.A. 89-287, S. 1; P.A. 94-122, S. 197, 340; P.A. 96-53, S. 2, 4; P.A. 97-19, S. 1, 2.)
History: 1971 act added exception re credit unions with at least two million dollars in assets in Subsec. (e); P.A. 73- 270 deleted provision in Subsec. (d) which had limited loans to one entity to five thousand dollars or one per cent of capital and surplus and rephrased Subsec. (e); P.A. 75-107 increased loan limit in Subsec. (d) from twenty-five to thirty per cent and in Subsec. (e) from twenty-five and thirty thousand dollars to thirty-five and forty thousand dollars; P.A. 75-121 added Subsec. (g); P.A. 77-95 added exception in Subsec. (d) re fifty per cent limit; P.A. 77-179 deleted provision in Subsec. (b) which had stated that leases, easements and reservations to U.S. of fissionable materials are not deemed encumbrances, required full payment within fifteen, rather than ten, years in Subsec. (e)(1) and substituted reference to Sec. 36-206(a) for reference to Sec. 36-198(d) in Subsec. (f); P.A. 79-130 increased loan limit in Subsec. (d) from fifty to sixty per cent, required full payment in Subsec. (e)(1) in twenty rather than fifteen years and in (e)(2) and (3) within forty rather than thirty years, increased loan limit in (e)(2), from thirty-five to fifty-five thousand dollars and in (e)(3) from forty to sixty thousand dollars and added Subsec. (h); P.A. 81-391 added Subsec. (i) permitting the accrual of interest on mortgage loans and the addition of such accrued interest to the mortgage debt; P.A. 84-93 amended Subsec. (c) reducing the number of appraisers of real estate required from two to one, amended Subsec. (d) increasing the total amount of loans allowed secured by mortgages of real estate from thirty per cent to sixty per cent of paid-in and unimpaired capital and surplus, amended Subsec. (e) to delete certain restrictions on the amount of loans permitted based upon the amount of assets held by a credit union and amended Subsec. (f) to delete provision excluding fees from the computation of "charges incident to the making of the loan"; P.A. 85-415 made technical changes; (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"); P.A. 88-46 amended Subsec. (a) by providing that the mileage limitation does not apply to loans secured by a member's primary residence; P.A. 88-65 made technical changes in Subsecs. (f) and (h); P.A. 89-287 increased the loan limit in Subsec. (d) from sixty to eighty per cent; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-198b transferred to Sec. 36a-442 in 1995; P.A. 96-53 amended Subsec. (f) to allow various mortgage loans without regard to certain statutory loan-to-value limits, effective May 7, 1996; P.A. 97-19 amended Subsec. (j) to provide that attorney fees in connection with mortgage loan made by a Connecticut credit union shall be paid by the borrower unless otherwise determined by the credit union, effective May 6, 1997.

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Sec. 36a-443. (Formerly Sec. 36-198c). Extension of lines of credit to members. A Connecticut credit union may extend preapproved lines of credit to its members including the issuance of credit cards, lend money to individual members in connection with the lines of credit and pay and agree to pay obligations incurred by its members in connection with the lines of credit. Application for the lines of credit shall be prepared and submitted to the credit committee or loan officer for approval in the manner provided for loans in section 36a-456.
(P.A. 85-415, S. 24; P.A. 94-122, S. 198, 340.)
History: P.A. 94-122 changed credit union to Connecticut credit union, effective January 1, 1995; Sec. 36-198c transferred to Sec. 36a-443 in 1995.

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Sec. 36a-444. (Formerly Sec. 36-198d). Lien on shares of members. A Connecticut credit union shall have the right to impress a lien on the shares of each member to secure the payment of all absolute and contingent liabilities of such member to the Connecticut credit union.
(P.A. 85-415, S. 23; P.A. 94-122, S. 199, 340.)
History: P.A. 94-122 changed credit union to Connecticut credit union, effective January 1, 1995; Sec. 36-198d transferred to Sec. 36a-444 in 1995.

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Sec. 36a-445. (Formerly Sec. 36-198e). Tax and loan and note accounts. (a) As used in this section:
(1) "Tax and loan account" means an account, the balance of which is subject to the right of immediate withdrawal, established for receipt of payments of federal taxes and certain United States obligations. Such accounts are not shares as defined in subdivision (7) of section 36a-435; and
(2) "Note account" means a note, subject to the right of immediate call, evidencing funds held by depositories electing the note option under applicable United States Treasury Department regulations. Note accounts are not shares, as defined in subdivision (7) of section 36a-435.
(b) Subject to the regulations of the United States Treasury Department, Connecticut credit unions may serve as depositories for federal taxes or as United States Treasury tax and loan depositories, and satisfy any requirement in connection therewith, including maintaining tax and loan accounts and note accounts, and pledging collateral.
(c) Connecticut credit unions shall pay a return on note accounts at the rates required by the United States Treasury Department.
(d) In addition to the requirements contained in the regulations of the United States Treasury Department, Connecticut credit unions shall meet all requirements in order to obtain any available insurance of deposits contained in tax and loan accounts and note accounts by the National Credit Union Administration's Share Insurance Fund.
(P.A. 85-234; P.A. 92-12, S. 62; P.A. 94-122, S. 200, 340; P.A. 99-22, S. 5, 8.)
History: (Revisor's note: The references to "subsection (d) of section 36-194" in Subsec. (a)(1), (2) were corrected editorially in 1991 to "subsection (h) of section 36-194" to reflect the changes made to Sec. 36-194 by public act 85-415, S. 1); P.A. 92-12 made technical changes in Subsec. (a); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-198e transferred to Sec. 36a-445 in 1995; P.A. 99-22 made technical changes in Subsec. (a), effective May 12, 1999.

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Sec. 36a-446. (Formerly Sec. 36-200). Shares; value; withdrawal; minors; trusts; retirement accounts; share insurance. (a) The capital of a Connecticut credit union shall consist of the net payments on shares made to it by its members.
(b) The par value of shares shall be five dollars or any multiple thereof, except that any Connecticut credit union in existence on May 23, 1969, having a par value of shares other than as set forth in this subsection shall not be required to change such par value by virtue of the requirements of this subsection.
(c) Payments on shares including membership shares or parts of shares may be received at any time. Payments on shares and parts of shares with the exception of membership shares may be withdrawn in accordance with the bylaws and in accordance with the Deposit Account Contract Act except that the governing board may require members to give sixty days' notice of intention to withdraw the whole or any part of their shares or payments on shares.
(d) When a share account in a Connecticut credit union has been established by or in the name of a minor or in the name of two persons, one or both of whom are minors, and payable to either or to the survivor, the share account shall be held for the exclusive right and benefit, including the privilege of pledge or assignment, of such minor or minors, and shall be free from the control or lien of all other persons except creditors. The share account shall be paid, together with dividends or interest thereon, to the person or persons in whose name the share account is held. The receipt of the person paid shall be a sufficient and valid release to such credit union for such share account or any part thereof.
(e) No Connecticut credit union may issue shares to or receive payments on shares from one person in trust for another unless accompanied by a statement signed by the member giving the name and residence of the beneficiary and setting forth to whom the principal and interest or dividends on such shares belong. Unless provision is made to the contrary in such statement, the shares may, on the death of the trustee, be paid to the beneficiary and the Connecticut credit union shall be fully protected in making the payment. In the case of a trust created by deed, will or other instrument, a certified copy of the instrument establishing the trust shall be filed by the member if at any time requested by the Connecticut credit union.
(f) A Connecticut credit union may, with the written approval of the commissioner and subject to applicable restrictions of state and federal law, receive from members payments on shares that will comprise the assets of an individual retirement account established by such member as authorized by Section 408 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, or of a Keogh or similar type retirement plan established by or for such member as authorized by Section 401(d) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, or of a retirement plan established by or for such member as authorized by Section 401(k) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended. Payments on shares shall be established in a separate account from the shares of the member, and shall not be subject to pledge to secure loans by the Connecticut credit union to the member nor available for set-off by the Connecticut credit union if the member defaults on a loan. Such shares shall be treated as under separate ownership for purposes of applying any limit imposed by sections 36a-435 to 36a-475, inclusive, on the maximum amount of shares owned by a member. Otherwise, these shares are subject to all of the provisions of said sections relating to shares.
(g) A Connecticut credit union may, by written agreement, receive payments on shares which the member agrees not to withdraw within the time period specified in the agreement. Premature withdrawal shall be subject to such penalties as the commissioner may prescribe by regulation, adopted in accordance with chapter 54, except where withdrawal occurs on the member's death or disability, liquidation of the Connecticut credit union or the occurrence of any other condition the commissioner may prescribe by such regulation. The commissioner may by such regulation establish the minimum amount of any such payment on shares which may be subject to such written agreement, the maximum interest rate or rates which may be paid thereon and the time periods for which such rate or rates may be paid. Dividends may be paid at a rate established by such regulation.
(h) A Connecticut credit union may receive payments on shares, not exceeding one hundred thousand dollars in the aggregate, from a nonmember who is: (1) An officer, employee or agent of the United States, having official custody of public funds and lawfully investing such funds in the Connecticut credit union; or (2) an officer, employee or agent of the state of Connecticut or of any municipality or other political subdivision thereof having official custody of public funds and lawfully investing such funds in the Connecticut credit union.
(i) Except as provided in this subsection, all Connecticut credit unions shall maintain in full force and effect share insurance as provided under the Federal Credit Union Act, as from time to time amended. Any Connecticut credit union that fails to maintain in full force and effect share insurance as provided in this section shall terminate its corporate existence in this state as promptly as possible under such terms and conditions as the commissioner deems appropriate.
(1949 Rev., S. 5913; 1951, 1953, 1955, S. 2743d; 1967, P.A. 499, S. 2; 1969, P.A. 224, S. 2; 246, S. 2; 1971, P.A. 242, S. 2; P.A. 73-360, S. 2, 3; 73-565, S. 2, 4; P.A. 75-111, S. 2, 3; 75-203, S. 1, 2; 75-518, S. 9, 13; P.A. 77-179, S. 4, 5; 77- 182; 77-185; P.A. 81-173, S. 1, 8; P.A. 82-109, S. 3, 4, 6; P.A. 83-332, S. 1; P.A. 84-125, S. 3; P.A. 85-74, S. 1, 2; 85- 415, S. 17; P.A. 88-65, S. 55; P.A. 89-211, S. 39; P.A. 90-26, S. 4; P.A. 94-122, S. 201, 340; P.A. 99-36, S. 10.)
History: 1967 act increased value of shares owned re share or membership liability from five to ten thousand dollars in Subsec. (4); 1969 acts increased limit in Subsec. (4) to fifteen thousand dollars and deleted provision allowing share par value to be multiples of five in Subsec. (3); 1971 act added proviso in Subsec. (4) raising limit to twenty thousand dollars if shares are insured by National Credit Union Administration; P.A. 73-360 repealed Subsec. (2) which had allowed credit unions to charge entrance fee not exceeding twenty-five cents per share; P.A. 73-565 increased limits in Subsec. (4) from fifteen and twenty thousand dollars to twenty and twenty-five thousand dollars and authorized insurance of shares by facility other than National Credit Union Administration; P.A. 75-111 raised limit in Subsec. (4) from twenty to forty thousand dollars and deleted proviso which had allowed slightly higher limit for insured shares; P.A. 75-203 added Subsec. (8); P.A. 75-518 allowed par values in multiples of five not exceeding twenty-five dollars, protected right of nonconforming previously existing credit union to retain par value and replaced provision requiring payment of subscription at time subscribed in weekly or monthly instalments or in advance with provision allowing payments at any time in Subsec. (3); P.A. 77-179 reworded Subsecs. (1) and (5); P.A. 77-182 made minor changes in Subsec. (8) and added exception in Subdiv. (b) re premature withdrawal resulting from member's death or disability, etc., replaced forfeiture of dividends with penalties prescribed by commissioner and made penalties applicable to all dividends rather than to those "in excess of the dividend that would have been credited to regular shares in the same amount"; P.A. 77-185 raised limit in Subsec. (4) from forty to fifty thousand dollars and excluded shares insured in full under Federal Credit Union Act, Section 207; P.A. 81-173 amended Subsec. (4) to increase from fifty thousand to one hundred thousand dollars the maximum amount of shares a member may own, and deleted the exclusion of shares insured in full under the Federal Credit Union Act, and amended Subsec. (5) to provide that approval need not be obtained from the credit committee for a withdrawal from a share draft account; P.A. 82-109 amended Subsec. (1) by providing that a credit union has "the right to impress" a lien on a member's shares and amended Subsec. (5) by deleting the requirement that approval be obtained from the credit committee for a share withdrawal which would reduce the member's total amount of shares below certain specified amounts; P.A. 83-332 amended Subsec. (3) to remove the twenty-five dollar limit on the par value of credit union shares; P.A. 84-125 amended Subsec. (5) to except membership shares from those shares which may be withdrawn at any time; P.A. 85-74 deleted Subsec. (4) to remove the one hundred thousand dollar limit on individual members' deposit accounts and amended Subdiv. (a) of Subsec. (7) to allow state chartered credit unions to accept deposits for employee profit-sharing or deferred compensation plans; P.A. 85-415 made technical changes, changed numeric Subsec. indicators to alphabetic ones and incorporated provisions formerly in Secs. 36-199a, 36-200b and 36-210; P.A. 88-65 deleted an obsolete reference in Subsec. (i) to share insurance other than that provided under the Federal Credit Union Act; P.A. 89-211 clarified references to the Internal Revenue Code of 1986; P.A. 90-26 deleted Subsec. (j) re commission, bonus or fee for the sale of shares; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-200 transferred to Sec. 36a-446 in 1995; P.A. 99-36 made a technical change in Subsec. (f).

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Sec. 36a-447. (Formerly Sec. 36-202). Meetings. (a) A regular meeting of members of the Connecticut credit union shall be held annually at a date, time and place determined by the governing board. Special meetings may be held as provided in the bylaws.
(b) Notice shall be given to each member in writing by the secretary at least ten days prior to the regular or special meeting. In the case of a special meeting, the notice shall clearly state the purpose of the meeting and the matters which will be considered.
(c) Each member shall have a single vote at all meetings regardless of the amount of his shareholdings. A member may not vote by proxy.
(1949 Rev., S. 5914; 1953, S. 2744d; 1969, P.A. 121, S. 1; P.A. 85-415, S. 8; P.A. 94-122, S. 202, 340.)
History: 1969 act required that regular meeting be held annually in January, February or March as designated by directors where previously provision re special meetings held for "general" meetings as well; P.A. 85-415 made technical changes and transferred provisions defining the fiscal year to Sec. 36-194; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-202 transferred to Sec. 36a-447 in 1995.

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Sec. 36a-448. (Formerly Sec. 36-203). Governing board. (a) The governing board shall have not less than five nor more than fifteen members.
(b) The initial governing board shall be elected at the organization meeting of the Connecticut credit union as provided in subsection (f) of section 36a-437, and thereafter by the members of the Connecticut credit union at the annual meeting as provided in section 36a-447.
(c) A director shall (1) hold office until his successor has qualified and for the term provided in the bylaws except that the term may not exceed three years, and (2) be and remain a member in good standing of the Connecticut credit union.
(d) No member of the governing board may receive compensation for services as a member of the governing board or of any committee of the Connecticut credit union except the supervisory committee. Connecticut credit union officers, directors and committee members may be reimbursed for reasonable and necessary out-of-pocket expenses actually incurred and paid in the performance of their official duties. The treasurer or any other officer serving in the capacity of chief financial officer may be compensated in an amount determined by the governing board.
(e) Vacancies on the governing board shall be filled in the manner prescribed in the bylaws.
(1949 Rev., S. 5915; 1953, S. 2745d; 1957, P.A. 180; 1959, P.A. 64; 1961, P.A. 48; 50, S. 1; 1969, P.A. 224, S. 3; 268, S. 3; P.A. 73-142, S. 1, 2; P.A. 75-92; P.A. 77-179, S. 7, 8, 22; P.A. 81-173, S. 4; P.A. 85-415, S. 9; P.A. 91-357, S. 44, 78; P.A. 94-122, S. 203, 340.)
History: 1959 act amended Subsec. (3)(c) by substituting "authorize" for "recommend"; 1961 acts inserted provisions in Subsec. (1) re management of affairs and appointment of supervisory committee, and added (k) and (l) to Subsec. (3); 1969 acts in Subsec. (3) authorized board of directors to determine maximum number of shares which member may hold and specified in Subsec. (1) that supervisory committee consist of at least three but no more than five members; P.A. 73- 142 added proviso allowing interest refunds on certain specified loans at different rates than on others and allowing omission of such refunds in Subsec. (3); P.A. 75-92 replaced detailed provision re interest refunds with more general provisions and allowed their payment following annual, semiannual or quarterly accounting period rather than following close of business on December thirty-first; P.A. 77-179 reworded Subsecs. (1) and (2), added Subsecs. (4) to (9) re powers of board of directors and repealed Subsec. (3) which formerly contained powers of directors; P.A. 81-173 amended Subsec. (5) by providing that the title of the chief operating officers shall be president or general manager as the bylaws may provide; P.A. 85-415 made technical changes and transferred provisions of Subsecs. (2), (4), (5), (6), (7), (8) and (9) to Secs. 36- 203a and 36-203b; P.A. 91-357 deleted reference to Sec. 36-194 and added reference to Subsec. (f) of Sec. 36-196 in Subsec. (b); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-203 transferred to Sec. 36a-448 in 1995.

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Sec. 36a-449. (Formerly Sec. 36-203a). Governing board meetings. (a) The governing board shall meet at least monthly. The governing board shall keep complete minutes of all its meetings which shall include the names of all directors present at each meeting.
(b) The certificate of organization, the bylaws and any amendments thereto shall be maintained with the permanent records of the governing board's meetings.
(P.A. 85-415, S. 11; P.A. 94-122, S. 204, 340.)
History: P.A. 94-122 divided the section into Subsecs. (a) and (b) and made other technical changes, effective January 1, 1995; Sec. 36-203a transferred to Sec. 36a-449 in 1995.

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Sec. 36a-450. (Formerly Sec. 36-203b). Governing board powers. Committees. (a) Except for those powers specifically conferred on the credit committee or the supervisory committee or unless otherwise delegated, the business affairs of the Connecticut credit union shall be managed by the governing board.
(b) In addition to the authority conferred on the governing board by the provisions of sections 36a-435 to 36a-475, inclusive, the bylaws, or other applicable law, and except to the extent otherwise delegated or unless such action would be detrimental to the financial integrity of the Connecticut credit union, the governing board shall: (1) Prescribe the conditions for membership and expel members; (2) determine limits on loan amounts, interest rates and maturities and establish unsecured loan limits and security requirements in addition to those imposed by said sections; (3) declare dividends; (4) designate one or more depositories of, and direct and manage the deposit and investment of, funds of the Connecticut credit union, except in the matter of loans to members; (5) authorize interest refunds to members; (6) determine the maximum amount of shares that a member may own, which may be less than the maximum amount provided in said sections; (7) approve, or authorize designated officers of the Connecticut credit union to approve, all usual expenditures incident to the conduct of the business of the Connecticut credit union; (8) establish and implement personnel policies and procedures; (9) cause to be obtained and maintained in full force at all times the bond required by said sections; (10) cause to be prepared every month and maintained on file in the principal office of the Connecticut credit union a list of all delinquent loans and establish and implement policies for the handling of delinquent loans; (11) authorize any extraordinary expenditure necessary or appropriate for the conduct of the business of the Connecticut credit union; (12) fill any vacancies that may arise among the officers, on the supervisory committee or on the credit committee, in the manner provided in the bylaws; and (13) exercise such other authority and perform such other duties as the bylaws may prescribe.
(c) The governing board may appoint, (1) for the terms specified in the bylaws, a credit committee of not less than three nor more than five members of the Connecticut credit union, none of whom shall simultaneously serve on the supervisory committee; (2) for the terms specified in the bylaws, a supervisory committee of not less than three nor more than five members of the Connecticut credit union, none of whom may simultaneously serve on the credit committee or as an officer of the Connecticut credit union or be otherwise regularly employed by it and only one of whom may simultaneously serve as director of the Connecticut credit union; (3) an executive committee of not less than three nor more than five directors, one of whom shall be the chairman of the governing board or the chief executive officer of the Connecticut credit union; (4) an investment officer or an investment committee from among the members of the Connecticut credit union; (5) one or more membership officers from among the members of the Connecticut credit union, who shall not be the treasurer, an assistant treasurer or loan officer; and (6) one or more loan officers, who shall not be members of the supervisory committee but who may be members of the credit committee. Loan officers shall be subject to all of the restrictions and other provisions of sections 36a-435 to 36a-475, inclusive, relating to officers of the Connecticut credit union.
(d) The governing board may employ a president or general manager, as the bylaws may provide, to conduct or to supervise the business of the Connecticut credit union, such person to be compensated as the governing board deems appropriate.
(P.A. 85-415, S. 10; P.A. 94-122, S. 205, 340; P.A. 99-36, S. 11.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-203b transferred to Sec. 36a-450 in 1995; P.A. 99-36 made technical changes.

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Sec. 36a-451. (Formerly Sec. 36-203c). Executive committee. (a) To the extent the governing board delegates its authority to the executive committee, the executive committee shall act for the governing board between meetings of the governing board, in the following areas: (1) Action on applications for membership, including applications submitted to and not approved by a membership officer, and the expulsion of members; (2) borrowing of funds by the Connecticut credit union; (3) deposit and investment of funds of the Connecticut credit union, except in the matter of loans to members; (4) matters involving employees of the Connecticut credit union; and (5) other business matters of an ordinary rather than extraordinary nature.
(b) The executive committee shall keep complete minutes of all actions taken by it, copies of which shall be submitted to the governing board at its next meeting.
(c) The executive committee shall function and its members shall serve at the pleasure of the governing board.
(P.A. 85-415, S. 13; P.A. 94-122, S. 206, 340.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-203c transferred to Sec. 36a-451 in 1995.

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Sec. 36a-452. (Formerly Sec. 36-203d). Investment policy. (a) At least once a year, the governing board of each Connecticut credit union shall adopt an investment policy governing investments made pursuant to this section. No Connecticut credit union shall make any investment pursuant to this section unless the purchase and holding of such investment is consistent with the Connecticut credit union's investment policy. The policy shall establish standards for the making of prudent investments, which standards shall include, but not be limited to, (1) the rating of individual investments by nationally recognized rating services, if any, and (2) standards for diversification of the Connecticut credit union's investment portfolio among industry categories. The policy shall provide for the frequent and periodic review by the Connecticut credit union of investments made pursuant to this policy and shall provide for the reasonable and expeditious divestiture of investments which the governing board, upon its review, no longer deems prudent or consistent with the Connecticut credit union's investment policy. The investment policy and any investment made pursuant to the policy shall be subject to the supervision of the commissioner concerning safe and sound banking practices.
(b) The investment officer or investment committee shall act for the governing board between meetings of the governing board in all matters involving the deposit or investment of funds of the Connecticut credit union, except in the matter of loans to members. The investment officer or investment committee shall report to the governing board at each regular meeting of the governing board. At each regular meeting of the governing board, the governing board of each Connecticut credit union shall review investments made by the Connecticut credit union pursuant to this section. The minutes of the meetings of such governing board shall recite the results of each such review. The governing board shall cause the Connecticut credit union to use reasonable efforts to divest as expeditiously as possible any investment which the governing board, upon its review, no longer deems prudent or consistent with the Connecticut credit union's investment policy.
(c) A Connecticut credit union may invest its funds: (1) In bonds which are a direct obligation of the United States, any state or territory of the United States, or any instrumentality of the United States or of any state or territory of the United States, provided such bonds are rated in the three highest rating categories by each nationally recognized rating service that rates such bonds; (2) in bank accounts which are insured by or under a program operated by an agency or instrumentality of the United States; (3) in out-of- state bank accounts which are insured by or under a program operated by an agency or instrumentality of the United States, but only to the extent such accounts are insured; (4) subject to the commissioner's approval, in stock, bonds, debentures or other investments in one or more organizations which provide or will provide a service necessary to or in the conduct of the business of the Connecticut credit union, provided written notice of the investment shall be given to the commissioner within ten days of such investment; (5) in a central credit union organized under sections 36a-435 to 36a-475, inclusive; (6) in the notes or share accounts of any Connecticut credit union or federal credit union, except that the Connecticut credit union receiving the investment shall not accept from any Connecticut credit union or federal credit union an amount greater than the maximum amount to which the share account may be insured, or five per cent of the investing Connecticut credit union or federal credit union's assets, whichever is higher; (7) with the prior written approval of the commissioner, in the shares of, or loans to, cooperatives, except that no Connecticut credit union may invest more than five per cent of its paid-in and unimpaired capital and surplus; (8) in a participating interest in any part or all of the outstanding loans of any other Connecticut credit union or federal credit union; (9) in debt obligations of banks, which obligations have original maturities of one week or less, provided no Connecticut credit union may invest more than five per cent of its paid-in and unimpaired capital and surplus; (10) in debt obligations, other than bonds, issued or fully guaranteed as to principal and interest by the United States or any of its agencies or instrumentalities; and (11) subject to the prior written approval of and any limitations imposed by the commissioner, in any other investments the commissioner deems appropriate in light of such factors as the financial condition and needs of the Connecticut credit union and the degree of risk inherent in the investment.
(P.A. 85-415, S. 16; P.A. 88-30; P.A. 92-12, S. 63; P.A. 94-122, S. 207, 340; P.A. 96-44, S. 7; P.A. 99-36, S. 12.)
History: P.A. 88-30 added Subdivs. (10) and (11) in Subsec. (c) re certain debt obligations and other investments approved by the commissioner; P.A. 92-12 made technical changes in Subsec. (c); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-203d transferred to Sec. 36a-452 in 1995; P.A. 96-44 amended Subsec. (a) to require the governing board to annually adopt an investment policy including prescribed standards, and to provide for divestiture of imprudent investments, amended Subsec. (b) to require review of the policy at each regular board meeting and reasonable efforts to divest imprudent or inconsistent investments, and amended Subdiv. (c)(1) to redefine bonds; P.A. 99-36 made technical changes in Subsec. (c).

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Sec. 36a-453. (Formerly Sec. 36-204). Officers. (a) In accordance with the bylaws, the officers of a Connecticut credit union shall be a chairman of the board or president, vice chairman or vice president, secretary and treasurer who shall be elected by the governing board from among the members of the governing board and who shall not hold more than one office at a time. The governing board may appoint such other officers as the bylaws or sections 36a-435 to 36a-475, inclusive, provide.
(b) The duties of the officers shall be as set forth in the bylaws and as determined by the governing board.
(c) Notwithstanding any provision of section 36a-441 or 36a-442, or subsections (a) and (c) of section 36a-446, or section 36a-448, 36a-454 to 36a-456, inclusive, 36a- 460 to 36a-462, inclusive, 36a-468 or 36a-474, the term of office of any Connecticut credit union official elected prior to October 1, 1977, shall not be altered.
(1949 Rev., S. 5916; February, 1965, P.A. 476; P.A. 76-172, S. 3, 5; P.A. 81-173, S. 3; P.A. 85-415, S. 12; P.A. 91- 357, S. 45, 78; P.A. 94-122, S. 208, 340; P.A. 99-36, S. 13.)
History: 1965 act replaced former provisions re election of officers which had simply stated that "The bylaws shall also provide whether the officers shall be elected by the members or the directors of the credit union"; P.A. 76-172 rephrased provisions and prohibited holding more than one office at any time, where previously section specified that one person may be both secretary and treasurer; P.A. 81-173 permitted the bylaws to provide for the election of officers with the titles of chairman of the board and vice chairman; P.A. 85-415 made technical changes and divided section into Subsecs; P.A. 91-357 deleted references to repealed sections and made technical changes in Subsec. (c); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-204 transferred to Sec. 36a-453 in 1995; P.A. 99-36 made a technical change in Subsec. (a).

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Sec. 36a-454. (Formerly Sec. 36-204a). Benefits for Connecticut credit union employees and their families. Liability or indemnity coverage for directors, credit committee members and supervisory committee members. (a) In addition to providing direct compensation to its employees, a Connecticut credit union may, either independently or in conjunction with one or more other Connecticut credit unions, in the discretion of a majority of the governing board, provide death benefits, disability benefits, accident benefits, hospital, medical, surgical and dental benefits, incentive savings benefits, severance benefits, retirement benefits and other employee benefits for its active and retired employees and their families. The provisions of this section shall be subject to the conditions and requirements imposed by the Employee Retirement Income Security Act of 1974, Public Law 93-406, as from time to time amended.
(b) A Connecticut credit union may provide personal liability or indemnity insurance coverage for its directors, credit committee members and supervisory committee members.
(1963, P.A. 176; 1969, P.A. 287, S. 1, 2; P.A. 77-179, S. 9; 77-198; 77-604, S. 56, 84; P.A. 85-415, S. 25; P.A. 90-26, S. 5; P.A. 94-122, S. 209, 340.)
History: 1969 act repealed Subsec. (b), relettering (c) accordingly and authorizing participation in retirement program for employees rather than in "the retirement fund of the Credit Union National Association"; P.A. 77-179 rephrased Subsec. (b) and added Subsec. (c) re compensation of employees, officers, etc.; P.A. 77-198 reworded Subsec. (a); P.A. 77-604 made technical correction in Subsec. (a)(2); P.A. 85-415 made technical changes and transferred provisions to Secs. 36- 203 and 36-208; P.A. 90-26 amended provisions re benefits for credit union employees and their families in Subsec. (a), deleted Subsec. (b) re maximum value of face amount of life insurance policy, relettered Subsec. (c) as Subsec. (b) and deleted Subsecs. (d) and (e) which had authorized credit unions to participate in retirement program for employees and had authorized compensation for services rendered by employees; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-204a transferred to Sec. 36a-454 in 1995.

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Sec. 36a-455. (Formerly Sec. 36-205). Credit committee. Loans. Lines of credit. (a) Except to the extent to which it delegates its authority to the loan officer or loan officers, the credit committee shall review and act on all applications for extensions of credit or for release or substitution of collateral including those not acted upon or disapproved by a loan officer. The credit committee may establish and amend guidelines for action on the applications for its guidance and that of the loan officer. The credit committee shall, at least annually, review all extensions of credit and offers to extend credit under a line of credit established pursuant to section 36a-443. The credit committee shall meet at least monthly provided each member has prior notice of the meeting. All actions by the committee shall be by majority vote of those members present at any duly called meeting at which a quorum is present. A quorum shall comprise not less than a majority of the members of the credit committee. The credit committee shall keep complete minutes of all of its meetings, including the names of those present at each meeting.
(b) The loan officer or officers shall act on applications for extensions of credit or for the release or substitution of collateral within the limits prescribed by the governing board and consistent with any guidelines established by the credit committee. The loan officer or officers shall provide to the credit committee at each credit committee meeting a written record of all applications received subsequent to the loan officer's or officers' last report and any action taken thereon. A loan officer may not disburse the funds of the Connecticut credit union for any extension of credit approved by the loan officer.
(1949 Rev., S. 5917; 1951, S. 2746d; 1961, P.A. 196; 1967, P.A. 101, S. 2; 1969, P.A. 224, S. 4; P.A. 73-127, S. 1, 2; P.A. 75-66, S. 2, 3; P.A. 77-179, S. 10; P.A. 79-124; P.A. 82-92, S. 1, 2; P.A. 85-415, S. 14; P.A. 86-403, S. 75, 132; P.A. 91-357, S. 46, 78; P.A. 94-122, S. 210, 340.)
History: 1961 act raised maximum amount of unsecured loan from $500 to $750 and added provisions re loan officers; 1967 act raised limit for unsecured loan from seven hundred fifty to one thousand dollars; 1969 act replaced thousand dollar limit with limit consisting of the lesser of two thousand five hundred dollars or two and one-half per cent of capital and surplus and deleted provision which had allowed loan officers to approve loans beyond the limit if extra amount was "fully secured by unpledged shares"; P.A. 73-127 required approval of loan application by majority of committee members present rather than by unanimous decision of members present; P.A. 75-66 replaced previous loan limit with limit prescribed in Sec. 36-199(b), i.e. five thousand dollars or two and one-half per cent of capital and surplus; P.A. 77-179 entirely replaced previous provisions re credit committee; P.A. 79-124 added Subsec. (b); P.A. 82-92 amended Subsec. (b) by deleting the prohibition on credit unions issuing credit cards; P.A. 85-415 made technical changes, transferred provisions to Secs. 36- 203b and 36-206 and incorporated provisions formerly in Secs. 36-203 and 36-205; P.A. 86-403 made technical change in Subsec. (b); P.A. 91-357 deleted reference to Sec. 36-205 and added reference to Sec. 36-198c in Subsec. (c); P.A. 94- 122 made technical changes, effective January 1, 1995; Sec. 36-205 transferred to Sec. 36a-455 in 1995.

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Sec. 36a-456. (Formerly Sec. 36-206). Loans. Interest on loans. Authorization of interest refunds. Security. Regulations. (a) As provided in section 36a-441, a Connecticut credit union may make such secured and unsecured loans, including lease financing for personal property to its members if the leases are the functional equivalent of secured loans for personal property, with such maturities as may be determined by the governing board, repayable in weekly, semimonthly, monthly, quarterly or semiannual installments, but which may be repaid in whole or in part prior to maturity, to its members for provident or productive purposes, on such terms as sections 36a-435 to 36a-475, inclusive, the bylaws and any written loan policies of the governing board may permit.
(b) Applications for loans shall be submitted in writing to the credit committee, shall state the purpose for which the loan is desired and shall contain any other information the credit committee deems appropriate.
(c) No Connecticut credit union may make secured or unsecured loans to a member primarily or any person secondarily liable in reliance on the credit of such member totaling either the greater of two hundred dollars or ten per cent of the Connecticut credit union's paid-in and unimpaired capital and surplus.
(d) The governing board of the Connecticut credit union may establish the maximum rate of interest which the Connecticut credit union may charge, contract for and receive on loans to its members.
(e) Subject to regulations adopted by the commissioner, in accordance with chapter 54, the governing board of a Connecticut credit union may authorize interest refunds to members following the close of any annual, semiannual or quarterly accounting period. Refunds shall be made from income earned and received during such accounting period, in proportion to the interest paid by such members during the accounting period on reasonable, objective classes of loans established by the governing board and under such conditions as the governing board may prescribe.
(f) The following shall be security for loans made pursuant to this section:
(1) Share accounts in any Connecticut credit union or federal credit union or savings accounts in any bank, provided the savings accounts are insured by or under a program operated by an agency or instrumentality of the United States;
(2) Share accounts in any out-of-state credit union, or savings accounts in any out- of-state bank to the extent the accounts are insured by or under a program operated by an agency or instrumentality of the United States;
(3) A contract issued by a life insurance company under which such company is obligated to grant a cash value, loan value or other value to the pledgor or assignor within not more than one year after demand, but only to the extent of the value the company is obligated to grant;
(4) Stocks, bonds or other investment securities that, based on quality, maturity and marketability, are deemed by the Connecticut credit union to be appropriate security;
(5) A secondary mortgage on real property whose net equity value, as defined in section 36a-442, is at least twenty per cent of the appraised value of such real estate after the granting of the secondary mortgage pursuant to this subsection;
(6) Tangible personal property that, based on intended use and normal useful life and resale value, is deemed by the Connecticut credit union to be appropriate security for such loans; and
(7) The endorsement or other guaranty of a loan.
(g) Loans that are secured in full by pledge of the borrowing member's own shares may be made without regard to the installment repayment provisions of subsection (a) of this section and without the prior approval of the credit committee.
(h) A Connecticut credit union may make the following home or property improvement loans to its members: (1) Any loan, not exceeding the amount specified in Section 1703(b)(1) of the National Housing Act, as from time to time amended, insurable by the Secretary of the Department of Housing and Urban Development under Sections 1702 to 1709, inclusive, of that act, and (2) any loan, not exceeding the amount specified in Section 1709(b)(2) of the National Housing Act insurable by the Secretary of the Department of Housing and Urban Development for the maximum amount under Section 1709(k)(1) to (5), inclusive, or Section 1715k(h) of the National Housing Act.
(i) A Connecticut credit union may make loans to members for the payment of expenses of college or university education for a member or a member of a member's family. The loans shall be subject to the applicable limitations on amount, duration and requirement of security provided for by sections 36a-435 to 36a-475, inclusive. All such loans which are fully secured by insurance available under the provisions of any state or federal legislation shall not exceed the applicable limitations imposed by such legislation, and the limitations shall apply in lieu of the corresponding limitations stated in said sections.
(j) No Connecticut credit union may make a loan other than a loan permitted by sections 36a-435 to 36a-475, inclusive. A loan other than a loan permitted by said sections shall be immediately due and payable on demand of the Connecticut credit union notwithstanding any provisions to the contrary contained in the note or other instrument evidencing such loan. An officer, director or member of a statutorily authorized committee of a Connecticut credit union who knowingly permits or participates in the making of a loan other than a loan permitted by said sections shall be fined not more than five hundred dollars and shall be primarily liable to the Connecticut credit union for the entire unpaid balance of the unauthorized loan. The illegality of a loan shall not be a defense in any action by the Connecticut credit union to recover the loan.
(k) No director, member of a statutorily authorized committee or employee of a Connecticut credit union may act as endorser or other guarantor on any loan made by the Connecticut credit union, except a loan made by the Connecticut credit union to a member of such person's immediate family. For purposes of this subsection "immediate family" means any person related by blood, adoption or marriage to the borrower, regardless of whether such person lives in the same household as the borrower.
(1949 Rev., S. 5919; 1969, P.A. 246, S. 4; P.A. 77-179, S. 11; 77-212, S. 2; P.A. 80-415, S. 1, 2; P.A. 81-123, S. 2, 4; P.A. 85-415, S. 19; P.A. 86-137; P.A. 87-5; P.A. 94-122, S. 211, 340; P.A. 96-53, S. 3, 4; P.A. 99-36, S. 14.)
History: 1969 act deleted reference to interest charged at twelve per cent per annum; P.A. 77-179 specified that interest is charged on unpaid principal balance "inclusive of all charges incident to the making of the loan" and added Subsec. (b) re interest refunds; P.A. 77-212 raised interest rate from one to one and one-quarter per cent per month in Subsec. (a); P.A. 80-415 changed interest rate to the greater of fifteen per cent per annum or one per cent in excess of discount rate on ninety- day commercial paper in effect at federal reserve bank in district where credit union is located; P.A. 81-123 amended Subsec. (a) by deleting a specific interest rate and permitting the board of directors of each credit union to establish the maximum rate of interest, subject to the approval of the banking commissioner; P.A. 85-415 made technical changes and added provisions formerly in Secs. 36-198, 36-199, 36-205, 36-205a, 36-207 and 36-207a; P.A. 86-137 deleted a provision in Subsec. (c) which restricted credit unions from making unsecured loans in excess of fifteen thousand dollars or two and one-half per cent of their paid-in and unimpaired capital and surplus; P.A. 87-5 amended Subsec. (g) by deleting the one- year limitation on loans secured by credit union members' shares; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-206 transferred to Sec. 36a-456 in 1995; P.A. 96-53 amended Subsec. (a) to include lease financing for personal property, and amended Subsec. (d) to delete provision requiring prior written approval of commissioner, effective May 7, 1996; P.A. 99-36 made technical changes.

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Sec. 36a-457. (Formerly Sec. 36-208). Supervisory committee. Members. Powers. Duties. (a) The supervisory committee shall have the power to suspend at any time, by a two-thirds vote of its members, at a meeting called for that purpose, any director, officer or employee of the Connecticut credit union or any member of the credit committee. Within seven days after suspension, the supervisory committee shall cause notice to be given to all members of the Connecticut credit union of a special meeting of members to be held for the purpose of hearing the report of the supervisory committee regarding the suspension. The membership of the Connecticut credit union shall have, by majority vote, the authority to accept or reject the report of the supervisory committee. The supervisory committee shall take any action with respect thereto as the members deem necessary.
(b) The supervisory committee shall make or cause to be made a comprehensive annual audit of the books and affairs of the Connecticut credit union, including its assets, liabilities, capital, income and expense accounts and board and committee minutes.
(c) The supervisory committee shall make any additional audits and supplemental verifications and examinations of the affairs of the Connecticut credit union it deems appropriate, or the governing board or commissioner request. On authorization of the governing board, the supervisory committee may engage any assistance necessary for the performance of its duties including having any audit, examination or verification required by law, regulation or bylaw, performed by an independent certified public accountant or a holder of a certificate of authority as a public accountant, the cost of which shall be paid by the Connecticut credit union.
(d) Promptly following completion of an audit or other verification or examination, the supervisory committee shall (1) file a written report at the office of the Connecticut credit union and (2) present the report to the governing board at its next meeting, and a summary thereof to the members at the next annual meeting or if the audit was not performed by the supervisory committee, the outside firm or person may present the report or summary thereof.
(e) Following the completion of any audit by or for the supervisory committee, or at any time that the supervisory committee discovers any operating practices of the Connecticut credit union that it deems unsafe, a majority of the committee may give notice to all members of a special meeting of members to be held for the purpose of receiving the report of the supervisory committee of its audit or of the operating practices. The membership of the Connecticut credit union shall have, by majority vote, the authority to accept or reject the report of the supervisory committee. The supervisory committee shall take any action the members deem necessary.
(f) The supervisory committee shall meet at least annually and keep complete minutes of all meetings, including the names of those present at each meeting. Supervisory committee members may be compensated for the reasonable value of their time expended in the performance of their duties.
(1949 Rev., S. 5918; 1959, P.A. 63; 1961, P.A. 49; 50, S. 2; 1969, P.A. 268, S. 1, 2; P.A. 76-172, S. 1, 5; P.A. 81-173, S. 5; P.A. 85-415, S. 15; P.A. 94-122, S. 212, 340.)
History: 1959 act added to Subsec. (3) prohibition against serving as director; 1961 acts repealed provision re filling of vacancies in supervisory committee (formerly (2)(c)) and added present (2)(d); 1969 act required examination of credit union's affairs on semiannual rather than quarterly basis in Subsec. (2) and entirely replaced Subsec. (3) which had prohibited supervisory committee member from serving as credit committee member or director; P.A. 76-172 inserted new Subsec. (1), renumbered former Subsecs. (1) and (2) accordingly, deleted former Subsecs. (3) and added Subsecs. (4) to (7), essentially reorganizing and rephrasing existing provisions; P.A. 81-173 amended Subsec. (1) to change the meeting requirements of the supervisory committee from at least quarterly to at least annually; P.A. 85-415 made technical changes and transferred the provisions of Subsec. (1) to Sec. 36-203b; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-208 transferred to Sec. 36a-457 in 1995.

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Sec. 36a-458. (Formerly Sec. 36-209). Reserve requirements. (a) A Connecticut credit union shall maintain a reserve against bad loans and other losses, which shall not be distributed so long as any assets other than cash remain on its books.
(b) There shall be set aside from the gross earnings of the Connecticut credit union determined immediately prior to the payment of dividends a regular reserve against losses on loans and against such other losses as may be specified in regulations adopted by the commissioner pursuant to chapter 54. The Connecticut credit union shall set aside the greater of (1) such amounts as may be required by the National Credit Union Administration or any other federal regulatory body having jurisdiction or (2) amounts in accordance with the following schedule: (A) A Connecticut credit union in operation for more than four years and having assets of five hundred thousand dollars or more shall set aside ten per cent of its gross income until the regular reserve shall equal four per cent of the total of outstanding loans and risk assets, then five per cent of its gross income until the regular reserve equals six per cent of the total of outstanding loans and risk assets; and (B) a Connecticut credit union in operation less than four years or having assets of less than five hundred thousand dollars shall set aside ten per cent of its gross income until the regular reserve equals seven and one-half per cent of the total of outstanding loans and risk assets, then five per cent of its gross income until the regular reserve equals ten per cent of the total of outstanding loans and risk assets.
(c) The commissioner may decrease the reserve requirement set forth in subsection (b) of this section when he deems a decrease necessary or desirable. The commissioner may also require special reserves to protect the interests of members either by regulation adopted pursuant to chapter 54 or for an individual Connecticut credit union.
(d) Whenever the regular reserve falls below the stated percentages of the total of outstanding loans and risk assets, it shall be replenished by regular contributions in such amounts as may be needed to maintain the reserve goals.
(1949 Rev., S. 5920; 1951, S. 2747d; 1971, P.A. 403, S. 1; P.A. 81-173, S. 2; P.A. 85-415, S. 26; P.A. 89-287, S. 2; P.A. 94-122, S. 213, 340.)
History: 1971 act replaced provisions which had required addition of twenty per cent of net earnings before dividends to reserve until reserve equals fifteen per cent of total loans outstanding on December thirty-first of any year at which time no more need be added except to maintain required ratio; P.A. 81-173 established reserve requirements for credit unions depending upon the age and assets of a credit union and added Subsec. (b) permitting the banking commissioner to decrease the reserve requirement or require special reserves; P.A. 85-415 made technical changes; P.A. 89-287 amended Subsec. (b) by adding Subdiv. (1) authorizing alternative reserve requirements and relettered Subdivs. (1) and (2) as Subparas. (A) and (B); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-209 transferred to Sec. 36a-458 in 1995.

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Sec. 36a-459. (Formerly Sec. 36-210). Dividends. (a) Dividends may be declared by the governing board to be paid only from the remaining net earnings of the Connecticut credit union, after provision for required reserves, on such terms and conditions as the bylaws and the governing board determine. Such dividends may be declared at a rate or rates which vary in relationship to one or more of the following criteria: (1) The par value of shares, (2) the levels of share balances, (3) the classes of shares as established by the governing board, and (4) the agreed time for which shares shall remain in the Connecticut credit union. No Connecticut credit union may pay any dividend while its capital is impaired. The commissioner may restrict the payment of dividends whenever it appears that the payment of dividends would adversely affect the financial condition of the Connecticut credit union.
(b) Dividends shall be declared and credited or paid on: (1) Shares that are fully paid, provided shares that are fully paid during only part of a dividend period shall be entitled to no more than a proportionate part of the dividend, except that shares that become fully paid during the first ten days of any dividend period may receive full dividend credit for that dividend period; or (2) the actual dollar value of the share account. No dividend may be credited or paid to any person who does not own one or more shares at the end of the dividend period.
(1949 Rev., S. 5921; 1955, S. 2748d; 1957, P.A. 110; 1961, P.A. 52; 53; 1969, P.A. 184, S. 2; P.A. 73-141; 73-390, S. 1, 2; P.A. 75-265, S. 1, 2; P.A. 80-24, S. 1, 2; P.A. 81-123, S. 3, 4; 81-173, S. 6; P.A. 82-109, S. 5, 6; P.A. 83-229, S. 2, 6; 83-332, S. 2; P.A. 85-415, S. 18; P.A. 87-7; P.A. 90-26, S. 6; P.A. 94-122, S. 214, 340.)
History: 1961 acts amended Subsec. (1) by allowing periodic estimation as provided by bylaws, and added maximum dividend provision in Subsec. (2); 1969 act added reference to semiannual and quarterly dividend periods in Subsec. (2) and added provisions re payment of proportionate part of dividends shares owned or fully paid for only part of dividend period; P.A. 73-141 added reference to monthly dividend periods in Subsec. (2); P.A. 73-390 allowed calculation of dividends from first of month if shares payment made on or before tenth rather than fifth of any month in Subsec. (2); P.A. 75-265 rephrased and reorganized section, replacing previous detailed provisions with more general statements and adding provisions authorizing higher interest rates in Subsecs. (2) and (3); P.A. 80-24 raised interest rate in Subsec. (2) from six to seven per cent per annum; P.A. 81-123 amended Subsec. (2) by deleting the maximum dividend rate of seven per cent and permitting the board of directors of each credit union to establish the rate, subject to the approval of the commissioner; P.A. 81-173 amended Subsec. (3) by deleting the provision concerning the forfeiture of additional dividends due to the premature withdrawal of shares; P.A. 82-109 amended Subsec. (3) by deleting the restriction "If the bylaws so provide" and by adding levels of share balances as a criterion to base the dividend rate on; P.A. 83-229 amended Subsec. (2) to eliminate the commissioner's prior written approval of the dividend rate to be paid, to allow the commissioner to restrict the payment of dividends when it appears payment would adversely affect the credit union's financial condition and to allow rather than require the commissioner to establish maximum dividend rates higher that those applicable to federal credit unions; P.A. 83-332 amended Subsec. (2) to allow the payment of dividends on the actual dollar value of a share account rather than only on fully paid up or proportionate shares; P.A. 85-415 made technical changes; P.A. 87-7 amended Subsec. (c) by adding the classes of shares as a criterion to base the dividend rate on and by deleting the reference in Subdiv. (3) to the "time for which shares have been fully paid"; P.A. 90-26 moved provisions re declaration of dividends from Subsec. (c) to Subsec. (a) and deleted provisions authorizing the commissioner of banking to establish by regulation rates to be paid on shares, inserted the term dividend period in Subsec. (b) and deleted Subsec. (c); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-210 transferred to Sec. 36a-459 in 1995.

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Sec. 36a-460. (Formerly Sec. 36-211). Losses. Reduction of liabilities. When the losses of any Connecticut credit union result from a depreciation in the value of its investments, uncollectible loans or other causes which leave the capital of the Connecticut credit union impaired, the governing board may, with the prior written approval of the commissioner, order a proportionate reduction in the amount of its shares owned by its members so as to divide the loss equitably among them. If, thereafter, the Connecticut credit union realizes from its assets on hand at the time of such reduction a greater amount than was contemplated in the commissioner's order of reduction, the excess shall be divided among the members whose shares were so reduced, but only to the extent of the reduction.
(1949 Rev., S. 5922; P.A. 77-179, S. 13; P.A. 85-415, S. 21; P.A. 94-122, S. 215, 340.)
History: P.A. 77-179 rephrased provisions, substituting "investments" for "securities", "uncollectible loans" for "bad loans", etc.; P.A. 85-415 made technical changes; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-211 transferred to Sec. 36a-460 in 1995.

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Sec. 36a-461. (Formerly Sec. 36-213). Deposit of funds; withdrawals. Registration of securities; inspection. Bonding of officers, employees and authorized agents. (a) The funds of each Connecticut credit union shall be deposited, in its name, in financial institutions whose accounts are insured by or under a program operated by an agency or instrumentality of the United States, provided not more than ten per cent of its assets may be deposited in financial institutions whose principal office is located in any other state. The funds of a Connecticut credit union may be withdrawn only by check or withdrawal order, initiated by an officer or officers and in such manner as authorized by the governing board.
(b) All securities owned by a Connecticut credit union shall be registered in the Connecticut credit union's name or in the name of any other financial institution designated by the Connecticut credit union as its agent, or in the nominee name of any such financial institution. Records of securities owned by the Connecticut credit union shall be maintained at such Connecticut credit union or other financial institution.
(c) The records held by the Connecticut credit union concerning the Connecticut credit union's account with any of its depositories or financial institutions holding its securities, and the securities registered in the name of the Connecticut credit union and held by it, shall be subject to inspection at any time during business hours by any director, officer or member of the supervisory committee of the Connecticut credit union.
(d) Every officer, employee and authorized agent of each Connecticut credit union who has charge or possession of the funds, securities or other assets of the Connecticut credit union shall be bonded by a surety company authorized to do business in this state. Such bond shall be in favor of the Connecticut credit union and in such amount as is approved by the governing board. An executed duplicate of each such bond and any renewal thereof or premium receipt therefor shall be forthwith filed by the Connecticut credit union with the commissioner.
(1949 Rev., S. 5924; 1951, 1953, 1955, S. 2749d; 1961, P.A. 167; P.A. 77-179, S. 14; P.A. 85-415, S. 22; P.A. 94-122, S. 216, 340.)
History: 1961 act deleted restrictions in Subsec. (1) on signatures on checks or orders over $500; P.A. 77-179 rephrased provisions formerly in Subsec. (1) in newly created Subsecs. (1) to (3) and likewise reworded former Subsec. (2), renumbered as Subsec. (4); P.A. 85-415 made technical changes and incorporated provisions formerly in Sec. 36-198(f); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-213 transferred to Sec. 36a-461 in 1995.

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Sec. 36a-462. (Formerly Sec. 36-214). Regulations re conduct of Connecticut credit unions, enforcement of chapter and establishment of rates paid as dividends. The commissioner may adopt such regulations in accordance with the provisions of chapter 54 and make such findings, consistent with sections 36a-435 to 36a-475, inclusive, as may be necessary for the conduct of Connecticut credit unions and the enforcement of the provisions of said sections. The commissioner may adopt regulations in accordance with the provisions of chapter 54 to establish rates to be paid as dividends on shares having an agreed maturity in the manner provided in subsection (a) of section 36a-459.
(1949 Rev., S. 5925; 1967, P.A. 591, S. 5; P.A. 77-179, S. 15; P.A. 79-76, S. 1, 2; P.A. 82-139, S. 1, 3; P.A. 85-94, S. 4, 6; 85-415, S. 2; P.A. 88-230, S. 1, 12; 88-364, S. 52, 123; P.A. 90-98, S. 1, 2; P.A. 91-357, S. 47, 78; P.A. 93-142, S. 4, 7, 8; P.A. 94-122, S. 217, 340; P.A. 99-36, S. 15.)
History: 1967 act added exception in Subsec. (1) granting exemption re examination charge for first examination after organization; P.A. 77-179 included violations of commissioner's regulations and credit union's certificate of organization, authorized commissioner to order entity providing share insurance to take possession of credit union's property and business, specified protection of creditors and members rather than "shareholders" and rephrased provisions; P.A. 79-76 specified that "upon payment by the insuring entity to a member of a liquidated credit union the ensuring entity shall be subrogated to all rights of the member against such liquidated credit union to the extent of such payment"; P.A. 82-139 amended Subsec. (1) by replacing the requirement of an annual or more frequent examination with an examination conducted "as frequently as the commissioner deems appropriate or necessary"; P.A. 85-94 amended Subsec. (1) to eliminate requirement that credit union pay for examination expenses, other than for first examination after organization; P.A. 85-415 made technical changes, replaced numeric Subsec. indicators with alphabetic Subsec. indicators, added provisions previously in Secs. 36-216 and 36-222, amended Subsec. (c)(2) to permit another suitable person to take possession of the credit union's property and business and added Subsec. (d) re rates to be paid on dividends; P.A. 88-230 replaced "judicial district of Hartford-New Britain" with "judicial district of Hartford", effective September 1, 1991; P.A. 88-364 made a technical change; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 91- 357 deleted obsolete language re judge of the superior court from Subsec. (c); P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 94-122 deleted Subsecs. (b) through (d) re examination of books and records, actions to preserve assets and protect creditors and members, and regulatory authority, and appended the language of former Subsec. (d) to former Subsec. (a), effective January 1, 1995; Sec. 36-214 transferred to Sec. 36a-462 in 1995; P.A. 99-36 made a technical change.

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Sec. 36a-463. (Formerly Sec. 36-215). Reports to commissioner. Net worth restoration plan. Records. Fees. (a) A Connecticut credit union shall annually submit a written report to the commissioner within thirty-one days after the end of its fiscal year. The report shall be in the form prescribed by the commissioner, list the assets and liabilities of the Connecticut credit union, and contain any other information the commissioner may require. The information shall be verified under oath by any two of the following officers: The president, chairman, vice president, vice chairman or treasurer of the Connecticut credit union. The Connecticut credit union shall also provide the commissioner with such other reports and information as may be required by the commissioner. Each Connecticut credit union that fails to file any report required by this section shall pay to the state one hundred dollars for each day that it fails to file such report.
(b) A Connecticut credit union shall file with the commissioner within ten days after the organization meeting and annual meetings a list of the names and addresses of all directors, officers and members of the credit committee and the supervisory committee, and shall notify the commissioner within ten days after any changes which occur therein.
(c) A Connecticut credit union that is required under federal law to submit a net worth restoration plan to the board of the National Credit Union Administration shall simultaneously submit a final signed copy of such plan to the commissioner.
(d) A Connecticut credit union shall preserve all of its records in accordance with regulations adopted by the commissioner pursuant to chapter 54. The manner and form of record-keeping shall be subject to the commissioner's approval.
(e) The franchise and filing fee payable to the Secretary of the State upon the incorporation of a Connecticut credit union under the laws of this state, or for the filing of a certificate of amendment to the certificate of organization or a certificate of merger and the fee for certification by the Secretary of the State of the copy of the certificate of organization or certificate of amendment or merger shall be thirteen dollars.
(1949 Rev., S. 5926; 1951, S. 2751d; February, 1965, P.A. 268; P.A. 76-172, S. 2, 5; P.A. 85-415, S. 7; P.A. 89-251, S. 177, 203; 89-287, S. 3; P.A. 90-26, S. 7; P.A. 94-122, S. 218, 340; P.A. 99-22, S. 6, 8.)
History: 1965 act imposed ten-dollar fine for each day credit union fails to meet report deadlines, unless excused by commissioner; P.A. 76-172 required that report be verified by president or vice president and treasurer rather than by "two of the officers" and added Subsec. (b); P.A. 85-415 made technical changes and added Subsecs. (c) and (d) incorporating provisions formerly in Secs. 36-195, 36-196 and 36-217; P.A. 89-251 amended Subsec. (d) to increase the copy fee from ten dollars to thirteen dollars; P.A. 89-287 amended Subsec. (a) by authorizing the chairman or vice chairman of the credit union to verify certain information under oath and to increase penalty for failure to file reports from ten to one hundred dollars per day; P.A. 90-26 amended Subsec. (a) to provide that the information contained in the report required under this section shall be verified under oath by any two of the designated credit union officers, where previously treasurer had to be one of the two; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-215 transferred to Sec. 36a- 463 in 1995; P.A. 99-22 added new Subsec. (c) re submission of net worth restoration plans and redesignated former Subsecs. (c) and (d) as Subsecs. (d) and (e), effective May 12, 1999.

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Sec. 36a-464. (Formerly Sec. 36-219). Termination. (a) A Connecticut credit union may terminate its corporate existence and be dissolved by resolution as provided in section 33-1171. The dissolution shall be effected as provided by the law relating to corporations without capital stock.
(b) Within three days after the governing board has adopted a resolution to dissolve the Connecticut credit union, the governing board shall notify the commissioner of such resolution and inform the commissioner of the date on which the resolution will be voted on by the members of the Connecticut credit union. The affirmative vote of a majority of those Connecticut credit union members voting shall be required to approve the resolution to dissolve. On receipt of the notice, the commissioner may order the entity providing share insurance to the Connecticut credit union or some other suitable person to act as liquidating agent.
(c) Within three days after the members of such Connecticut credit union vote on the resolution of the governing board to dissolve the Connecticut credit union, the Connecticut credit union shall notify the commissioner if the resolution was adopted and, if adopted, shall certify to the commissioner the number of members who voted on the resolution and the number of members who voted in favor of adopting such resolution.
(d) On receipt of the certification, the commissioner shall:
(1) Take possession of the property and business of the Connecticut credit union; or
(2) Notify the liquidating agent, if one is appointed as provided in subsection (b) of this section, to take possession of the property and business of the Connecticut credit union; or
(3) Apply to the superior court for the judicial district of Hartford or the judicial district in which the Connecticut credit union is situated for the appointment of a receiver of the Connecticut credit union. The court may appoint the receiver after reasonable notice to the Connecticut credit union.
(e) The commissioner may terminate the corporate existence of any Connecticut credit union if the commissioner certifies, in writing, that no other reasonable alternatives are available to protect the members and creditors of such Connecticut credit union and, it appears that:
(1) The Connecticut credit union, through insolvency, repeated gross mismanagement or repeated neglect in the conduct of its operations, is no longer able to carry out the purposes for which it was formed; or
(2) The Connecticut credit union has abandoned its activities and is no longer functioning as a Connecticut credit union and termination cannot be accomplished by any other means. The commissioner may order the entity providing share insurance to the Connecticut credit union or some other suitable person to act as liquidating agent and shall notify the liquidating agent to take possession of the property and business of the Connecticut credit union. A copy of the certification executed by the commissioner shall be filed with the Secretary of the State.
(1949 Rev., S. 5933; P.A. 78-15; P.A. 83-229, S. 3, 6; P.A. 85-415, S. 32; P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; P.A. 91-357, S. 48, 78; P.A. 93-142, S. 4, 7, 8; P.A. 94-122, S. 219, 340; P.A. 95-220, S. 4−6; P.A. 96-256, S. 200, 209.)
History: P.A. 78-15 specified dissolution "by resolution as provided in subsection (a) of section 33-484" and added Subsecs. (b) to (e) re dissolution procedure; P.A. 83-229 amended Subsec. (b) to require the affirmative vote of a majority of those credit union members voting to approve a resolution to dissolve, amended Subsec. (d) to require the commissioner to be notified of the number of members who voted rather than members authorized to vote and added Subsec. (f) re termination of credit union's corporate existence by the commissioner; P.A. 85-415 made technical changes; P.A. 91-357 deleted obsolete language re judge of the superior court from Subsec. (d); P.A. 94-122 made technical changes, effective January 1, 1995 (Revisor's note: P.A. 88-230, P.A. 90-98 and P.A. 93-142 authorized substitution of "judicial district of Hartford" for "judicial district of Hartford-New Britain" in public and special acts of the 1994 regular and special sessions, effective September 1, 1996); Sec. 36-219 transferred to Sec. 36a-464 in 1995; P.A. 95-220 changed effective date of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 96-256 amended Subsec. (a) to replace reference to Subsec. (a) of Sec. 33-484 with Sec. 33-1171, effective January 1, 1997.

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Sec. 36a-465. (Formerly Sec. 36-219a). Distribution of assets upon liquidation. In the event of liquidation of a Connecticut credit union, the assets of the Connecticut credit union or the proceeds from any disposition of the assets shall be applied and distributed in the following sequence: (1) All fees and assessments due the commissioner; (2) secured creditors up to the value of their collateral; (3) costs and expenses of liquidation; (4) wages due the employees of the Connecticut credit union; (5) costs and expenses incurred by creditors in successfully opposing the release of the Connecticut credit union from certain debts as allowed by the commissioner; (6) taxes owed to the United States or any other governmental unit; (7) debts owed to the United States; (8) general creditors and secured creditors to the extent their claims exceed the value of their collateral; and (9) members, to the extent of uninsured share accounts, and the organization that insured the share accounts of the Connecticut credit union.
(P.A. 92-89, S. 18, 20; P.A. 94-122, S. 220, 340.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-219a transferred to Sec. 36a-465 in 1995.

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Sec. 36a-466. (Formerly Sec. 36-220). No exemption from taxation. Nothing in sections 36a-435 to 36a-475, inclusive, shall be construed to exempt Connecticut credit unions organized under said sections from taxation under the provisions of chapter 208.
(1949 Rev., S. 5934; P.A. 85-415, S. 30; P.A. 94-122, S. 221, 340; P.A. 99-36, S. 16.)
History: P.A. 85-415 made technical changes; P.A. 94-122 changed "credit unions" to "Connecticut credit unions", effective January 1, 1995; Sec. 36-220 transferred to Sec. 36a-466 in 1995; P.A. 99-36 made a technical change.

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Sec. 36a-467. (Formerly Sec. 36-221). License required of other entities. (a) No corporation without capital stock, voluntary association or society, organized under the laws of this state, except a savings and loan association or a licensed Connecticut credit union or a licensed mutual benefit association, may receive share payments from its members or make loans to its members, unless such entity has obtained a credit union license from the commissioner.
(b) When licensed as a Connecticut credit union by the commissioner, the entity shall possess all the powers and shall be subject to all the limitations and restrictions, except those relating to organizational procedure, contained in the general statutes relating to the powers, duties and operations of Connecticut credit unions.
(c) An application for a credit union license under the provisions of this section shall state the name and address of the applicant, the names and addresses of the directors and officers, the par value of shares, the terms and conditions of membership and of payments for shares, the terms and conditions under which loans are granted, the terms and conditions upon which dividends are paid and a current statement of condition of the applicant. The commissioner shall issue a credit union license within fifteen days after filing of such application.
(1949 Rev., S. 5935; P.A. 77-614, S. 161, 610; P.A. 78-121, S. 70, 113; 78-280, S. 6, 127; P.A. 80-482, S. 250, 345, 348; P.A. 85-94, S. 5, 6; 85-415, S. 31; P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; P.A. 91-357, S. 49, 78; P.A. 93-142, S. 4, 7, 8; P.A. 94-122, S. 222, 340.)
History: P.A. 77-614 replaced bank commissioner with banking commissioner, and made banking department a division within the department of business regulation with commissioner as its head, effective January 1, 1979; P.A. 78-121 referred to savings and loan associations rather than to "building or" savings and loan associations in Subsec. (1); P.A. 78-280 replaced "Hartford county" with "judicial district of Hartford-New Britain" in Subsec. (4); P.A. 80-482 restored banking division as independent department with commissioner as its head and abolished the department of business regulation; P.A. 85-94 amended Subsec. (1) to delete requirement of annual license renewal and Subsec. (2) to eliminate the twenty dollar application fee; P.A. 85-415 made technical changes and replaced numeric Subsec. indicators with alphabetic Subsec. indicators; P.A. 88-230 replaced "judicial district of Hartford-New Britain" with "judicial district of Hartford", effective September 1, 1991; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 91-357 deleted obsolete language re judge of the superior court from Subsec. (e); P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 94-122 deleted Subsecs. (d) and (e) re unlicensed credit unions and subpoena of witnesses and production of documents and made technical changes, effective January 1, 1995; Sec. 36-221 transferred to Sec. 36a-467 in 1995.

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Sec. 36a-468. (Formerly Sec. 36-223a). Conversion of Connecticut credit union into federal or out-of-state credit union. (a) A Connecticut credit union may be converted into a federal credit union or an out-of-state credit union by complying with the following requirements:
(1) The governing board shall adopt the proposition for conversion by majority vote and shall establish the date and time of a regular or special meeting of members for vote thereon.
(2) Written notice of the date, time and place of the regular or special meeting at which the proposition for conversion is to be considered shall be hand-delivered or mailed to each member at such member's last-known address as shown on the records of the Connecticut credit union not less than thirty nor more than fifty days prior to the date of the meeting. The written notice shall clearly describe the nature of and the reasons for the proposition and notify the member of such member's right to vote on the proposition in person or by mail ballot. The notice shall contain an official form of mail ballot. The notice and mail ballot shall be submitted to the commissioner for approval of its form and content prior to its distribution to members.
(3) Each member of the Connecticut credit union may cast one vote on the proposition for conversion. The affirmative vote of two-thirds of all the members voting, including those votes cast in person and those ballots properly completed and received by the Connecticut credit union prior to the time of the meeting, shall be required for approval of the conversion. A statement of the results of the vote, verified by the secretary of the meeting, shall be filed with the commissioner within ten days after the meeting.
(4) Promptly after the vote is taken and in no event later than ninety days thereafter, if the proposition for conversion received the affirmative vote of two-thirds of all the members voting, the Connecticut credit union shall take such action as may be necessary under the applicable federal or other state law to make it a federal credit union or an out-of-state credit union under such laws. Within ten days after receipt of the document evidencing the organization of the federal credit union or out-of-state credit union, such credit union shall file with the commissioner a copy of the document.
(5) A converting credit union shall, within ninety days after the receipt of the document evidencing its organization as a federal credit union or out-of-state credit union: (A) File with the Secretary of the State a certificate, signed by any two officers under oath stating that the credit union has converted to a federal credit union or out-of-state credit union pursuant to this section; (B) obtain from the Secretary of the State one or more certified copies of the certificate; and (C) record the certified copies in the office of the town clerk of each town in this state where such credit union owns real property.
(b) Once the certificate is filed with the Secretary of the State, the converting credit union shall cease to be a Connecticut credit union and shall no longer be subject to any of the provisions of sections 36a-435 to 36a-475, inclusive.
(c) The successor federal credit union or out-of-state credit union shall be vested with all of the assets and shall continue to be responsible for all of the obligations of the predecessor Connecticut credit union to the same extent as though the conversion had not taken place.
(d) A Connecticut credit union converting to an out-of-state credit union shall, on receipt of a document evidencing its organization as an out-of-state credit union, cease doing business within this state except that such out-of-state credit union may wind up its affairs in accordance with the provisions of this section.
(1961, P.A. 152; P.A. 74-230, S. 1, 3; P.A. 77-179, S. 20; P.A. 80-483, S. 107, 186; P.A. 85-415, S. 27; P.A. 91-357, S. 50, 78; P.A. 94-122, S. 223, 340; P.A. 99-36, S. 17.)
History: P.A. 74-230 replaced previous provisions re conversion with new provisions, specifically replacing Subsecs. (2) to (6) entirely and rephrasing Subsecs. (1) and (7), Subsecs. editorially reorganized so that former Subsec. (1) stands unnumbered and (2) to (7) became (1) to (6); P.A. 77-179 moved one-member-one-vote provisions from Subsec. (1) to Subsec. (3), merged Subsecs. (5) and (6) into single Subsec. and added new Subsec. (6) re cessation of business, for which provision was formerly made in Subsec. (5); P.A. 80-483 replaced numeric Subdiv. indicators with alphabetic indicators in Subsec. (5); P.A. 85-415 made technical changes, revising Subsec. and Subdiv. indicators; P.A. 91-357 made a technical change in Subsec. (d); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-223a transferred to Sec. 36a-468 in 1995; P.A. 99-36 made a technical change in Subsec. (b).

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Sec. 36a-469. (Formerly Sec. 36-223b). Conversion of federal or out-of-state credit union into Connecticut credit union. (a) A federal credit union or an out-of- state credit union, incident to establishment of its office in this state, may convert into a Connecticut credit union by (1) complying with all federal or state requirements requisite to enabling it so to convert; (2) filing with the commissioner proof of compliance, and (3) filing with the commissioner three copies of its certificate of organization signed by its directors as incorporators and two copies of its proposed bylaws as required by section 36a-437.
(b) When the commissioner has been satisfied that all of the requirements of subsection (a) of this section, and all other requirements of sections 36a-435 to 36a-475, inclusive, have been complied with, the commissioner shall (1) endorse the commissioner's approval on three copies of the certificate of organization and on two copies of the bylaws, (2) retain one copy of the certificate of organization and the bylaws, file one copy of the certificate of organization with the Secretary of the State, and return one copy of the certificate of organization, certified by the Secretary of the State, and one copy of the bylaws to the converting credit union, and (3) issue the license required by section 36a-436. Upon such approval and issuance of license, the federal credit union or out-of-state credit union shall become a Connecticut credit union as of the date it ceases to be a federal credit union or out-of-state credit union. The successor Connecticut credit union shall be vested with all of the assets and shall continue to be responsible for all of the obligations of the predecessor federal credit union or out-of-state credit union to the same extent as if the conversion had not taken place.
(c) Within ninety days of conversion, the Connecticut credit union shall record a certificate, signed by any two officers stating that the conversion is effective, in the office of the town clerk in each town in this state where the Connecticut credit union owns real property.
(1961, P.A. 146; P.A. 74-230, S. 2, 3; P.A. 75-518, S. 10, 13; P.A. 85-415, S. 28; P.A. 94-122, S. 224, 340; P.A. 99- 36, S. 18.)
History: P.A. 74-230 made provisions applicable to credit unions organized under laws of other state and replaced previous conversion provisions of Subsecs. (1) to (4) with new provisions labeled as Subsecs. (1) and (2); P.A. 75-518 substituted certificates of organization for articles of association, required filing of three copies of certificate, rather than one, and of two copies of bylaws, rather than one, specifying disposition of the documents in Subsec. (2); P.A. 85-415 made technical changes and inserted alphabetic Subsec. indicators, replacing previously existing alphabetic Subdiv. indicators with numeric indicators; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-223b transferred to Sec. 36a-469 in 1995; P.A. 99-36 made a technical change in Subsec. (b).

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Sec. 36a-469a. Conversion of Connecticut or federal credit union into mutual savings bank, mutual savings and loan association or mutual community bank. (a) (1) Any Connecticut credit union or federal credit union may convert into a mutual savings bank, a mutual savings and loan association, or a mutual community bank, as defined in subsection (r) of section 36a-70, in accordance with the provisions of this section.
(2) Any conversion of a federal credit union pursuant to this section shall be authorized only if permitted by federal law and shall be subject to all requirements prescribed by federal law.
(3) The converting credit union shall file with the commissioner: (A) A proposed plan of conversion which shall include current financial reports, current delinquent loan schedules, a combined financial report if applicable, a proposed business plan, a three- year financial forecast prepared by a certified public accounting firm or other professional firm approved by the commissioner, analyses of the regulatory effect of the conversion brought about by a change in the regulator, a method and schedule for terminating any nonconforming activities that would result from such conversion, and a provision requiring that for a period of at least two years after the effective date of the conversion, the converted mutual Connecticut bank shall not pay any fees or expenses to directors nor enter into any agreements with directors or their affiliates to provide any products or services to the converted mutual Connecticut bank; (B) a copy of the proposed certificate of incorporation and proposed bylaws; and (C) a certificate by the secretary of the converting credit union that the proposed conversion has been approved by the governing board and the members, in accordance with subdivision (4) of this subsection in the case of a converting Connecticut credit union, and in accordance with federal law in the case of a converting federal credit union.
(4) In the case of a converting Connecticut credit union, the plan of conversion shall require the approval of a majority of the governing board. After approving the plan of conversion, the governing board of the converting Connecticut credit union shall establish the date and time of a regular or special meeting of members for vote on the proposal. Written notice of the meeting at which the proposal is to be considered together with a mail ballot and a disclosure statement shall be hand-delivered or mailed to each member, at such member's last-known address as shown on the records of the converting Connecticut credit union, not more than thirty days nor less than fourteen days prior to the date of the meeting. The notice, disclosure statement and mail ballot shall comply with the requirements of Appendix A to 12 CFR Part 708a, as from time to time amended, and shall be submitted to the commissioner for approval prior to distribution to members. Each member of the converting Connecticut credit union may cast one vote on the proposal. The affirmative vote of two-thirds of all the members voting, including those votes cast in person and those ballots properly completed and received by the converting Connecticut credit union prior to the time of the meeting, shall be required for approval of the conversion.
(b) The commissioner shall not approve the conversion unless the commissioner makes the considerations, determinations and findings required by subsections (c), (d) and (e) of this section.
(c) The commissioner shall not approve the conversion unless the commissioner considers the following factors: (1) The population of the area to be served by the proposed mutual Connecticut bank; (2) the adequacy of existing banking facilities in the area to be served by the proposed mutual Connecticut bank; and (3) the character and experience of the proposed directors and officers.
(d) The commissioner shall not approve the conversion unless the commissioner determines that: (1) The converting credit union has complied with all applicable provisions of law; (2) the converting credit union has equity capital at least equal to the minimum equity capital required for the organization of the type of mutual Connecticut bank to which it is converting; (3) the proposed conversion will serve the public necessity and convenience; (4) conditions in the locality in which the proposed mutual Connecticut bank will transact business afford reasonable promise of successful operation; and (5) the proposed directors and executive officers possess capacity and fitness for the duties and responsibilities with which they will be charged. If the commissioner cannot make such determination with respect to any such proposed director or proposed executive officer, the commissioner may refuse to allow such proposed director or proposed executive officer to serve in such capacity in the proposed mutual Connecticut bank. As used in this subsection, "executive officer" means every officer of the proposed mutual Connecticut bank who participates or has authority to participate, other than in the capacity of a director, in major policy-making functions of the proposed mutual Connecticut bank, regardless of whether such officer has an official title or whether such officer's title contains a designation of assistant or whether such officer serves without salary or other compensation. The vice president, the chief financial officer, secretary and treasurer of the proposed mutual Connecticut bank are presumed to be executive officers, unless, by resolution of the governing board or by the proposed mutual Connecticut bank's bylaws, any such officer is excluded from participation in major policy-making functions, other than in the capacity of a director of the proposed mutual Connecticut bank, and such officer does not actually participate in major policy-making functions.
(e) The commissioner shall not approve the conversion unless the commissioner finds that the proposed mutual Connecticut bank will provide adequate services to meet the banking needs of all community residents, including low-income residents and moderate-income residents in accordance with a plan submitted by the converting credit union to the commissioner, in such form and containing such information as the commissioner may require. Upon receiving any such plan, the commissioner shall make the plan available for public inspection and comment at the Department of Banking and cause notice of its submission and availability for inspection and comment to be published in the department's weekly bulletin. With the concurrence of the commissioner, the converting credit union shall publish, in the form of a legal advertisement in a newspaper having a substantial circulation in the area, notice of such plan's submission and availability for public inspection and comment. The notice shall state that the inspection and comment period will last for a period of thirty days from the date of publication. The commissioner shall not make such finding until the expiration of such thirty-day period. In making such finding, the commissioner shall consider, among other factors, whether the plan identifies specific unmet credit and consumer banking needs in the local community and specifies how such needs will be satisfied, provides for sufficient distribution of banking services among branches or satellite devices, or both, located in low-income neighborhoods, contains adequate assurances that banking services will be offered on a nondiscriminatory basis and demonstrates a commitment to extend credit for housing, small business and consumer purposes in low-income neighborhoods.
(f) If the conversion is approved by the commissioner and the commissioner receives notification from the converting credit union that all approvals required under federal law, including approvals needed for deposit insurance by the Federal Deposit Insurance Corporation or its successor agency have been obtained and that any waiting period prescribed by federal law has expired, a certificate of authority to commence business shall be issued by the commissioner. After receipt of the certificate of authority, the converting credit union shall promptly file such certificate of authority and its certificate of incorporation with the Secretary of the State and with the town clerk of the town in which its principal office is located. Upon such filing, the license of the converting credit union shall automatically lapse and the converting credit union shall cease to be a credit union and shall become a mutual savings bank, mutual savings and loan association or mutual community bank, as the case may be. Upon such conversion, the converted mutual Connecticut bank shall possess all of the rights, privileges and powers granted to it by its certificate of incorporation and by the provisions of the general statutes applicable to the type of institution into which it converted, and all of the assets and business of the converting credit union shall be transferred to and vested in it without any deed or instrument of conveyance, provided the converting credit union may execute any deed or instrument of conveyance as is convenient to confirm such transfer. The converted mutual Connecticut bank shall be subject to all of the duties, relations, obligations and liabilities of the converting credit union, whether as debtor, depository or otherwise, and shall be liable to pay and discharge all such debts and liabilities, to perform all such duties in the same manner and to the same extent as if the converted mutual Connecticut bank had itself incurred the obligation or liability or assumed the duty or relation. All rights of creditors of the converting credit union and all liens upon the property of such credit union shall be preserved unimpaired and the converted mutual Connecticut bank shall be entitled to receive, accept, collect, hold and enjoy any and all gifts, bequests, devises, conveyances and appointments in favor of or in the name of the converting credit union and whether made or created to take effect prior to or after the conversion.
(g) Within ninety days after the conversion, the converted mutual Connecticut bank shall record a certificate, signed by the secretary and stating that the conversion is effective, in the office of the town clerk in each town in this state where the converted mutual Connecticut bank owns real property.
(h) The converted mutual Connecticut bank may not exercise any of the fiduciary powers granted to Connecticut banks by law until express authority therefor has been given by the commissioner.
(i) The converted mutual Connecticut bank may not convert to a capital stock bank for a period of three years following the date of the conversion from a Connecticut credit union or federal credit union to a mutual savings bank, mutual savings and loan association or mutual community bank, as the case may be.
(P.A. 97-209, S. 5, 6; P.A. 98-260, S. 10.)
History: P.A. 97-209 effective June 24, 1997; P.A. 98-260 deleted former Subsec. (b) re public hearing and redesignated existing Subsecs. (c) to (j) as Subsecs. (b) to (i).

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Sec. 36a-470. (Formerly Sec. 36-223c). Mergers. (a) A Connecticut credit union may, with the approval of the commissioner, merge with any other Connecticut credit union, federal credit union or out-of-state credit union. Such merger shall proceed in accordance with the provisions of chapter 602, except:
(1) The governing board of each Connecticut credit union participating in such merger shall adopt a proposition for merger by majority vote. The governing board of the terminating Connecticut credit union shall establish the date and time of a regular or special meeting of members of the terminating Connecticut credit union for the vote thereon.
(2) Written notice of the date, time and place of the meeting at which the proposition for merger is to be considered shall be hand-delivered or mailed to each member of the terminating Connecticut credit union at such member's last-known address as shown on the records of the terminating Connecticut credit union not less than thirty nor more than fifty days prior to the date of the meeting. The written notice shall clearly describe the nature of the reasons for the proposition. It shall further notify the member of such member's right to vote on the proposition in person or by mail ballot and shall have an official form of mail ballot attached. The notice and ballot shall be submitted to the commissioner for approval of its form and content prior to distribution to members.
(3) Each member of the terminating Connecticut credit union may cast one vote on the proposition for merger. The affirmative vote of two-thirds of the members of the terminating Connecticut credit union voting on the proposition for merger, including those votes cast in person and those ballots properly completed and received by the terminating Connecticut credit union prior to the time of the meeting, shall be required for approval of the merger except as provided in subdivision (4) of this subsection. A statement of the results of the vote, verified by the secretary of the meeting, shall be filed with the commissioner within ten days after the meeting.
(4) In lieu of the two-thirds affirmative vote of members, the commissioner may certify in writing on the certificate of merger that, from information available to the commissioner, one or more of the Connecticut credit unions participating in the merger is or may subsequently be in a doubtful or failing financial condition and that the merger must proceed without delay to protect the creditors and members of such Connecticut credit union or credit unions.
(5) Any federal credit union participating in such merger shall comply with all federal requirements for approval of the merger in lieu of the requirements of this section and shall file proof of such compliance with the commissioner.
(b) Following approval of the merger, the terminating Connecticut credit union shall execute and file with the commissioner three copies of a certificate of merger which shall set forth (1) the names of the participants in the merger, (2) the name of the continuing Connecticut credit union or federal credit union, and (3) a statement of the number of votes cast on the proposition for merger, the number of votes required for adopting and the number of votes cast in favor of the proposition for merger or, in lieu of such report of votes, the certificate of the commissioner provided for in subdivision (4) of subsection (a) of this section.
(c) When the commissioner is satisfied the merger would better serve the economic needs of the members of the Connecticut credit unions and is in the public interest, and that all of the requirements of this section and all other requirements of sections 36a- 435 to 36a-475, inclusive, have been complied with, the commissioner shall endorse the commissioner's approval on three copies of the certificate of merger, retain one copy, file one copy with the Secretary of the State and return one copy, certified by the Secretary of the State, to the continuing Connecticut credit union or federal credit union. A copy of such certificate shall be recorded in the offices of the town clerks in each town in this state where any real property owned by the terminating Connecticut credit union is located.
(d) Within sixty days of the commissioner's approval of the merger, the continuing Connecticut credit union shall file with the commissioner a certificate of amendment to its certificate of organization. Such certificate of amendment shall reflect all changes necessitated by the approval of the merger.
(e) The commissioner may authorize a merger pursuant to this section without regard to field of membership if the commissioner is satisfied that: (1) One or more of the Connecticut credit unions participating in the merger is or may subsequently be in a doubtful or failing financial condition; and (2) other alternatives to merger are not reasonably available to protect the members and creditors of one or more of the Connecticut credit unions.
(1969, P.A. 545, S. 1; 1971, P.A. 404, S. 1; P.A. 78-121, S. 105, 113; P.A. 82-139, S. 2, 3; P.A. 83-229, S. 4−6; P.A. 85-93, S. 1, 2; 85-415, S. 29; P.A. 91-357, S. 51, 78; P.A. 94-122, S. 225, 340; P.A. 96-256, S. 201, 209; P.A. 99-36, S. 19.)
History: 1971 act added provision re merger or consolidation of terminating credit union and another to protect creditors' and members' interests; P.A. 78-121 rephrased previous provisions in greater detail and added material designated as Subdivs. (a), (b), (e), (f) and (h); P.A. 82-139 amended Subsec. (d) by adding "from information available to the commissioner", and authorizing the commissioner to certify that a credit union "may subsequently be" in a doubtful or failing financial condition; P.A. 83-229 amended Subsec. (c) to clarify language re affirmative vote of two-thirds of those members voting on the proposition of merger and added Subsec. (i) concerning commissioner's authority to authorize a merger under certain conditions; P.A. 85-93 eliminated the requirement that the resulting credit union after a merger hold a meeting for approval of the merger, required only the terminating credit union to file a certificate of merger with the commissioner, eliminated the filing requirement with the town in which the certificate of organization was filed and each town where the terminating credit union holds a mortgage; P.A. 85-415 made technical changes and revised Subsec. and Subdiv. designations; P.A. 91-357 made a technical change in Subdiv. (3) of Subsec. (a); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-223c transferred to Sec. 36a-470 in 1995; P.A. 96-256 amended Subsec. (a) to replace reference to Ch. 600 with Ch. 602, effective January 1, 1997; P.A. 99-36 made a technical change in Subsec. (c).

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Sec. 36a-471. (Formerly Sec. 36-223d). Sale of assets. (a) A Connecticut credit union may, with the approval of the commissioner, sell all or a significant part of its assets in accordance with the provisions of section 36a-210.
(b) A Connecticut credit union may, with the approval of the commissioner, sell a subsidiary office.
(P.A. 81-207, S. 5; P.A. 85-415, S. 33; P.A. 93-59, S. 6, 8; P.A. 94-122, S. 226, 340.)
History: P.A. 85-415 made technical changes; P.A. 93-59 amended Subsec. (a) re allowing a credit union to sell all or a significant part of its assets with the commissioner's approval, deleted Subdivs. (1) and (2) of Subsec. (a) and Subsecs. (b), (c), (d), (e) and (f) re the procedures required to sell or acquire a credit union and added a new Subsec. (b) authorizing a credit union to sell a subsidiary office with the commissioner's approval, effective May 10, 1993; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-223d transferred to Sec. 36a-471 in 1995.

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Sec. 36a-472. (Formerly Sec. 36-223e). Out-of-state credit union doing business in this state. An out-of-state credit union may, with the prior written approval of the commissioner, do business as a credit union in this state if a Connecticut credit union is permitted to do business as a credit union in the state in which the out-of-state credit union is organized. Before granting approval, the commissioner shall determine that such out-of-state credit union: (1) Is a credit union organized under laws similar to sections 36a-435 to 36a-475, inclusive; (2) is financially solvent; (3) has share insurance as provided under the federal Credit Union Act; (4) is effectively examined and supervised by the banking commissioner or similar official of the state in which it is organized; and (5) needs to conduct business in this state to adequately serve its members in this state.
(P.A. 85-208, S. 1, 3; P.A. 87-9, S. 2, 3; P.A. 94-122, S. 227, 340; P.A. 99-36, S. 20.)
History: (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-223e transferred to Sec. 36a-472 in 1995; P.A. 99-36 made a technical change.

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Sec. 36a-473. (Formerly Sec. 36-223f). Reports and examination of out-of- state credit unions doing business in this state. Net worth restoration plan. Revocation or suspension of approval. (a) The commissioner may require any out-of-state credit union doing business in this state pursuant to section 36a-472 to submit an annual audit report to the commissioner.
(b) An out-of-state credit union doing business in this state that is required under federal law to submit a net worth restoration plan to the board of the National Credit Union Administration shall simultaneously submit a final signed copy of such plan to the commissioner.
(c) The commissioner may examine any such out-of-state credit union or may enter into an agreement with the banking commissioner or similar official of the state in which it is organized to insure that such out-of-state credit union is effectively examined and supervised.
(d) The commissioner may, after giving notice and an opportunity to be heard to such out-of-state credit union, revoke or suspend the approval given such out-of-state credit union to do business in this state if the commissioner determines that such approval would not be granted if such out-of-state credit union were required to apply for such approval at any time subsequent to the date of initial approval.
(P.A. 85-208, S. 2, 3; P.A. 87-9, S. 2, 3; P.A. 94-122, S. 228, 340; P.A. 99-22, S. 7, 8.)
History: (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-223f transferred to Sec. 36a-473 in 1995; P.A. 99-22 added new Subsec. (b) re submission of net worth restoration plans and redesignated former Subsecs. (b) and (c) as Subsecs. (c) and (d), effective May 12, 1999.

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Sec. 36a-474. (Formerly Sec. 36-224). Exceptions. Except for institutions which are licensed pursuant to sections 36a-435 to 36a-475, inclusive, the provisions of said sections shall not apply to any institution subject to and under the general supervision of any agency of the United States or to any other entity subject to the general supervision of the commissioner.
(1949 Rev., S. 5931; P.A. 77-179, S. 21; P.A. 99-36, S. 21.)
History: P.A. 77-179 replaced previous provision which read: "The provisions of this chapter shall not apply to any state bank and trust company, national banking association, savings bank, building or savings and loan association, industrial bank, federal credit union or other institution subject to and under the general supervision of any agency of the United States or under the general supervision of the commissioner"; Sec. 36-224 transferred to Sec. 36a-474 in 1995; P.A. 99- 36 made a technical change.

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Sec. 36a-475. Credit union service organizations. Shared service centers. (a) As used in this section, section 36a-44 and subsection (b) of section 36a-441:
(1) "Credit union service organization" means an organization providing services that are useful to credit unions in the conduct of their lawful operations and the provision of lawful services to their members;
(2) "Shared service center" means a facility which is connected electronically with two or more credit unions so as to permit the facility, through personnel at the facility and the electronic connection, to provide to a credit union member at the facility the same credit union services that the credit union member could lawfully obtain at the main office of the member's credit union.
(b) In addition to any investment powers conferred pursuant to sections 36a-441 and 36a-452, a Connecticut credit union may invest its funds in the shares, stocks or obligations of a credit union service organization which owns, operates or participates in the operation of one or more shared service centers offering services to credit unions, including Connecticut credit unions, to the same extent that a credit union organized under federal law would be permitted under applicable federal law to invest in such a credit union service organization.
(c) With the approval of the commissioner, a credit union service organization may (1) own, operate or participate in the operation of one or more shared service centers offering services to Connecticut credit unions and (2) enter into contracts with other persons to operate such shared service centers, provide goods or services useful in the operation of such shared service centers or both.
(d) With the approval of the commissioner, one or more Connecticut credit unions may (1) enter into a union of interest among credit unions to operate a shared service center for the benefit of their members or (2) contract with a credit union service organization described in subsection (c) of this section to own or operate a shared service center offering services to credit unions including Connecticut credit unions or to provide to the credit union service organization office space, equipment, personnel or services useful in or related to the operation of such a shared service center.
(e) A Connecticut credit union may, in order to enable its members to conduct transactions through shared service centers, whether or not it invests its funds in a credit union service organization pursuant to subsection (b) of this section, enter into agreements with and pay appropriate fees and service charges to a credit union service organization approved by the commissioner pursuant to subsections (c) and (d) of this section.
(f) The commissioner may make, amend and rescind such forms and orders, adopt such regulations in accordance with the provisions of chapter 54 and make such findings, consistent with this section, section 36a-44 and subsection (b) of section 36a-441, as may be necessary for the conduct of credit union service organizations and shared service centers providing services to Connecticut credit unions and to aid in the enforcement of this section, section 36a-44 and subsection (b) of section 36a-441.
(g) As frequently as the commissioner deems appropriate or necessary, the commissioner or his authorized representative may conduct an examination of the assets, records, books and accounts of (1) any credit union service organization participating in the operation of a shared service center located in this state and providing services to Connecticut credit unions and (2) any such shared service center, except, in either case, assets, records, books and accounts of federal credit unions.
(h) Whenever it is necessary to preserve the assets and protect the creditors and members of any Connecticut credit union which participates in a shared service center arrangement approved by the commissioner pursuant to subsections (c) and (d) of this section or whenever any credit union service organization or shared service center which provides services to Connecticut credit unions conducts its shared service center business in an unsafe or unauthorized way or whenever enforcing compliance with or restraining a violation of any provision of law within his jurisdiction, the commissioner may issue a temporary order or apply to the superior court for the judicial district of Hartford for an injunction, restraining the credit union service organization from the paying out of any funds in respect of, or the conducting of any further transactions involving, any one or more Connecticut credit unions. An injunction may be granted provided the credit union service organization has reasonable notice of the application. The commissioner shall not be required to prove that an adequate remedy at law does not exist.
(i) Each credit union service organization and shared service center described in subsections (c) and (d) of this section shall be deemed a "financial institution" for purposes of sections 36a-41 to 36a-45, inclusive, and shall comply with the provisions of said sections.
(j) Every officer, employee and authorized agent of each credit union service organization and shared service center approved by the commissioner pursuant to subsections (c) and (d) of this section who has charge or possession of the funds, securities or other assets of such credit union service organization or shared service center, or of any Connecticut credit union, shall be bonded by a surety company authorized to do business in this state. Such bond shall be in favor of the credit union service organization or such other person as may be directed by the commissioner, and in such amount as is approved by the board of directors of the credit union service organization, or as may otherwise be directed by the commissioner. An executed duplicate of each such bond and any renewal thereof or premium receipt therefor shall be forthwith filed by the credit union service organization with the commissioner.
(P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; P.A. 95-220, S. 4−6; 95-253, S. 1−7; P.A. 99-36, S. 22.)
History: (Revisor's note: P.A. 88-230, 90-98, 93-142 and 95-220 authorized substitution of "judicial district of Hartford" for "judicial district of Hartford-New Britain" in public and special acts of the 1995 regular and special sessions of the General Assembly, effective September 1, 1998); P.A. 99-36 amended Subsec. (a) by deleting Subdiv. (3) re definition of "commissioner".

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Secs. 36a-476 to 36a-484. Reserved for future use.

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