CHAPTER 4. Management and Operations [14400. - 14768.]

Chapter 4 added by Stats. 1979, Ch. 112.

§§ 14400–14768 · 68 sections

1. ARTICLE 1. General §§ 14400–14410 · 12 sections

   • § 14400 (a) The equity capital of the credit union shall consist of the credit union’s regular reserve account, the undivided earnings account, any appropriated…
   • § 14401 A credit union may borrow money from any source in an aggregate amount not to exceed 50 percent of the paid-in and unimpaired capital and surplus of the credit…
   • § 14402 Every credit union may purchase and hold, either individually or jointly with other credit unions or affiliated organizations, a lot and building to be…
   • § 14403 Every credit union may purchase and hold, either individually or jointly with other credit unions or affiliated organizations, furniture, fixtures, vaults, and…
   • § 14404 A credit union shall not invest more than the amounts permitted pursuant to regulations which shall be promulgated by the commissioner for the investments set…
   • § 14405 Every credit union may: (a) (1) Become a member of any organization or organizations composed of credit unions, credit associations, chambers of commerce,…
   • § 14406 The savings capital, as defined in Section 14400, undivided profits, and reserve funds of a credit union shall be deposited only in the following: (a)…
   • § 14407 (a) Whenever the losses of any credit union resulting from a depreciation in the value of its securities or otherwise exceed its undivided earnings and reserve…
   • § 14408 No credit union shall make any gift or donation having a value in excess of twenty-five thousand dollars ($25,000) unless the gift or donation is in the best…
   • § 14409 (a) Every credit union shall obtain adequate bond or insurance coverage, for each director, officer, supervisory committee member, audit committee member, and…
   • § 14409.2 (a) Notwithstanding the provisions of Sections 1051, 1052, and 1054 of the Labor Code and Section 2947 of the Penal Code, any credit union or officer or…
   • § 14410 (a) (1) A member of the board of directors, supervisory committee, audit committee, or credit committee shall not receive compensation for that member’s…
2. ARTICLE 2. Directors §§ 14450–14456 · 7 sections

   • § 14450 The credit union shall be directed by a board consisting of an odd number of directors, at least five in number, each of whom shall be a member of the credit…
   • § 14451 Directors may be elected for a term of three years or less. If directors are elected for terms in excess of one year their terms of office shall be staggered…
   • § 14452 The office of any director shall be declared vacant if such director is absent from three consecutive regular meetings of the board of directors unless excused…
   • § 14452.5 A vacancy on the board of directors shall be filled in accordance with Section 7224 of the Corporations Code, subject to the following: (a) A vacancy that…
   • § 14453 The board of directors of every credit union shall have the general management of the affairs, funds, and records of the credit union. The board shall meet on…
   • § 14454 The directors shall hold a meeting of all directors within 10 days after the annual meeting of members pursuant to Section 14804 for the purpose of electing…
   • § 14456 Unless the bylaws expressly reserve any or all of the following duties to the members, the directors have all of the following special duties: (a) (1) To act…
3. ARTICLE 3. Officers §§ 14500–14502 · 3 sections

   • § 14500 (a) The officers of every credit union shall include a chairman or president, one or more vice chairmen or vice presidents, a secretary and a treasurer or…
   • § 14501 If the bylaws so provide, the directors may elect the same person as secretary and treasurer or chief financial officer.
   • § 14502 The powers and duties of the officers of any credit union required pursuant to subdivision (a) of Section 14500 are as prescribed in the bylaws.
4. ARTICLE 4. Supervisory Committee §§ 14550–14556 · 8 sections

   • § 14550 Every credit union shall have a supervisory committee of at least three persons, provided that the number of members on the committee is an odd number, each of…
   • § 14551 The supervisory committee may: (a) Suspend at any time by unanimous vote, at a meeting called for that purpose, the credit committee, or any member thereof, or…
   • § 14551.5 The supervisory committee shall be responsible for reviewing the credit union’s policies and control procedures to safeguard against fraud and self-dealing,…
   • § 14552 The supervisory committee shall, within seven days after suspension of any or all members of the credit committee, or any member of the board of directors, or…
   • § 14553 (a) The supervisory committee shall at least once each year make or cause to be made an audit of the books and records and an examination of the business and…
   • § 14554 No member of the supervisory committee shall serve as a member of the credit committee, as the credit manager, as a member of the board of directors, or as an…
   • § 14555 The commissioner may, after investigation and finding that the supervisory committee is not performing in conformance with this article, declare all offices of…
   • § 14556 (a) The board of directors may, by resolution, establish an audit committee in lieu of a supervisory committee. An audit committee that meets all the…
5. ARTICLE 5. Credit Committee and Loan Officers §§ 14600–14605 · 6 sections

   • § 14600 Every credit union shall have a credit committee of at least three persons, each of whom shall be a member of the credit union, or in the alternative, a credit…
   • § 14601 No member of the credit committee or the credit manager or any loan officer shall serve as a member of the supervisory committee.
   • § 14602 (a) (1) No credit union shall create any obligation with a credit union member, without the written approval of a majority of all the members of the credit…
   • § 14603 The credit committee, the credit manager, or a loan officer may approve in advance, upon their own motion or upon the application of any member, the extension…
   • § 14604 A credit union member whose written application to enter into any obligation is denied, may appeal from the denial of the credit committee, the credit manager,…
   • § 14605 A credit manager shall not disburse or have the authority to authorize any person to disburse the proceeds of any loan. A credit manager shall not authorize or…
6. ARTICLE 6. Investments §§ 14650–14659 · 10 sections

   • § 14650 Subject to the limitations of Sections 14402, 14403, and 14404, any credit union or credit unions may purchase, acquire and hold outstanding shares of a…
   • § 14651 (a) Every credit union may invest in the shares of stock of a corporation, or in membership or economic interests of a limited liability company, organized…
   • § 14652 Every credit union may invest in securities and other assets described in Chapter 10 (commencing with Section 800) of Division 1 as legal investments for…
   • § 14652.5 (a) A credit union may organize, sponsor, operate, control, or render investment advice to, an investment company, or underwrite, distribute, or sell…
   • § 14653 Credit unions may invest in a trust organized solely for the purpose of investing in United States government securities and United States government agency…
   • § 14653.5 Notwithstanding any other provision of law, a credit union may make any investment authorized by regulation or in writing by the commissioner.
   • § 14654 Credit unions may purchase from the vendor or lessor of any personal property, conditional sale contracts or vehicle lease agreements covering the sale or…
   • § 14656 A credit union may, in accordance with rules and regulations prescribed by the commissioner, purchase from any liquidating credit union notes made by…
   • § 14657 (a) A credit union may invest in charitable donation accounts, or CDAs, in accordance with this section as a means of providing charitable contributions and…
   • § 14659 (a) A credit union that is investing to fund an employee benefit plan obligation may purchase an investment that would otherwise be impermissible if the…
7. ARTICLE 7. Reserves §§ 14700–14703 · 4 sections

   • § 14700 Every credit union shall create and maintain a regular reserve as specified by the commissioner.
   • § 14701 Losses incurred by a credit union may be charged to its regular reserve as permitted by rule of the commissioner.
   • § 14702 In addition to the regular reserve, special reserves shall be established when required by regulation or when found necessary by the board of directors of the…
   • § 14703 A credit union shall establish and maintain an allowance-for-loan-losses account in accordance with generally accepted accounting principles. The commissioner…
8. ARTICLE 8. Penalties §§ 14750–14768 · 18 sections

   • § 14750 Except as provided in Section 14950, any officer, director, member of a committee of a credit union, loan officer appointed pursuant to Section 14602, or…
   • § 14751 Any officer, director, member of a committee, credit manager, or loan officer appointed pursuant to Section 14602 who violates Section 14750 is primarily…
   • § 14752 Except as provided for in Section 14051 and this article, any person who willfully violates any provision of this division, or who willfully violates any rule…
   • § 14753 Any director, officer, or employee of a credit union who asks for, receives, or agrees to receive any money, property, or thing of value for his personal…
   • § 14754 Any director, officer, or employee of a credit union who knowingly overdraws his or her account with that credit union, except for any overdraft pursuant to an…
   • § 14755 Any director, officer, agent, or employee of any credit union who knowingly receives or possesses the credit union’s property otherwise than in payment of a…
   • § 14756 Any director, officer, agent, or employee of a credit union who (1) knowingly concurs in making or publishing any written report, exhibit, or statement of the…
   • § 14758 Any director, officer, or employee of a credit union who makes or maintains, or attempts to make or maintain, a deposit of the credit union’s funds with any…
   • § 14759 Any officer, director, employee, or agent of any credit union who willfully makes a false or untrue entry in any book, record, report, statement concerning the…
   • § 14760 (a) Every director of a credit union is guilty of a misdemeanor who: (1) In case of the fraudulent insolvency of that credit union, has participated in the…
   • § 14761 Any officer or agent of any credit union who makes or delivers any guaranty or endorsement on behalf of the credit union whereby the credit union may become…
   • § 14762 A director of a credit union who concurs in any vote or act of the directors of the credit union by which it is intended to make a loan or discount to any…
   • § 14763 Any officer or employee of any credit union who intentionally conceals from the directors of the credit union any discounts or loans made by the credit union…
   • § 14764 No credit union shall purchase any real or personal property or any interest in real or personal property, including, but not limited to, a leasehold, or any…
   • § 14765 (a) An officer, as described in Section 14500, a director, or an employee of a credit union shall not purchase, directly or indirectly, or be interested in the…
   • § 14766 (a) An officer, as described in Section 14500, a director, or an employee of a credit union shall not purchase, directly or indirectly, or be interested in the…
   • § 14767 It is unlawful for any person willfully to make any untrue statement of a material fact in any document filed with the commissioner under this division, or…
   • § 14768 Any officer, director, employee, or agent of any credit union who abstracts or willfully misapplies any of the money, funds, or property of the credit union,…