PRIOR PRINTER'S NO. 2518 PRINTER'S NO. 3415
No. 1959 Session of 1975
INTRODUCED BY MESSRS. BENNETT, DOMBROWSKI, IRVIS, MILLIRON, FEE,
PRATT, COLE, GREEN, McCALL, SHUMAN, PANCOAST, POLITE, STAHL,
MRS. TOLL, MRS. KELLY, MESSRS. HALVERSON AND MEBUS,
NOVEMBER 25, 1975
AS REPORTED FROM COMMITTEE ON BUSINESS AND COMMERCE, HOUSE
OF REPRESENTATIVES, AS AMENDED, JUNE 8, 1976
AN ACT
1 Amending the act of September 20, 1961 (P.L.1548, No.658),
2 entitled "An act to provide for the organization,
3 incorporation, operation and supervision of cooperative
4 savings and credit associations, to be termed credit unions;
5 designating such credit unions as corporations and defining
6 their powers and duties; conferring certain powers and duties
7 on the Department of Banking; and providing penalties,"
8 providing additional powers for credit unions; changing <--
9 certain membership requirements; changing membership on the
10 board of directors; providing additional powers for directors
11 and officers; expanding withdrawal rights; requiring annual
12 audits and further regulating joint accounts.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Clauses (5) and (6) of subsection B of section 5,
16 act of September 20, 1961 (P.L.1548, No.658), known as the
17 "Credit Union Act," are amended and clauses are added to read:
18 Section 5. Powers.--* * *
19 B. A credit union shall have the following special powers:
20 * * *
21 (5) To make loans to [other] credit unions [or Federal
1 credit unions located within this Commonwealth] organized under
2 the laws of this Commonwealth or under the laws of any state or
3 under the laws of the United States: Provided, That the [term of
4 such loans shall not exceed one year and the] aggregate amount
5 outstanding on all such loans shall not exceed [ten] twenty-five
6 per centum of the [paid-in] unimpaired capital of the lending
7 credit union.
8 (6) To deposit its funds in [State] legally chartered banks,
9 national banks, bank and trust companies, savings banks, [or
10 national banking associations located in the Commonwealth of
11 Pennsylvania] savings associations, Federal savings and loan
12 associations and central-type credit union organizations.
13 * * *
14 (12) A credit union has power to act as an issuing agent of
15 the United States Treasury in the sale, issuance and redemption
16 of United States savings bonds to its members.
17 (13) To invest its funds in shares and become members of any
18 insured central-type credit union organized under the laws of
19 the United States or under the laws of the Commonwealth of
20 Pennsylvania to the extent to which the withdrawal or repurchase
21 value of such shares is insured by the National Credit Union
22 Share Insurance Program.
23 Section 2. Subsection A of section 6 of the act, amended <--
24 November 22, 1968 (P.L.1082, No.334), is amended to read:
25 Section 6. Membership.--A. Credit union organizations shall
26 be limited to groups having a potential membership of one
27 hundred or more adult persons and a common bond of association.
28 [within a well defined community or rural district by reason of
29 occupation or of membership in a religious congregation or
30 fraternal or labor organization.] The membership of a credit
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1 union shall be limited to and consist of the incorporators of
2 the credit union and such other persons, having the common bond
3 of association, set forth in the Articles of Incorporation, as
4 have been duly admitted members, have paid the entrance fee as
5 provided in the bylaws, have subscribed for one or more shares,
6 and have paid the initial installment thereon. Organizations
7 composed principally of the same group as the credit union
8 membership may be members. Employes of credit unions may be
9 members of such credit unions.
10 * * *
11 Section 3 2. Section 10 of the act, amended December 14, <--
12 1967 (P.L.735, No.343), is amended to read:
13 Section 10. Elections.--At the organization meeting and at
14 all subsequent annual meetings, the credit union shall elect a
15 board of directors of not less than five members, a credit
16 committee of not less than three members, and a supervisory
17 committee of not less than three nor more than five members, all
18 to hold office for such terms respectively, as the bylaws
19 provide and until successors are duly qualified. A member shall
20 not serve on more than one of the committees. Not more than one
21 member of the board, who shall not be the treasurer or an
22 assistant treasurer, may serve as a member of the [supervisory
23 committee or of the] credit committee. A member of the board of
24 directors, treasurer or an assistant treasurer may not serve on
25 the supervisory committee. A statement in writing of the names
26 and addresses of the members of the board and the committees and
27 the officers shall be filed with the Department of Banking
28 within ten days after their election and qualification. For
29 failure to file such statements when due, unless excused for
30 cause, the credit union shall pay to the Department of Banking
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1 five dollars ($5) for each day of its delinquency.
2 Section 4 3. The introductory paragraph of subsection A of <--
3 section 12 of the act is amended and a subsection is added to
4 read:
5 Section 12. Directors and Officers.--A. At [the first
6 meeting,] their organization meeting and within thirty days
7 following each annual meeting of the members, the directors
8 shall elect from their own number a president, one or more vice
9 presidents, a treasurer, [and] a secretary and may elect a
10 chairman of the board. The same individual may be both treasurer
11 and secretary. The directors may appoint one or more assistant
12 treasurers. The directors may appoint a membership officer from
13 among the members of the credit union, other than the treasurer,
14 an assistant treasurer, or a loan officer. The directors may
15 employ an officer in charge of operations whose title shall be
16 general manager or executive vice president. The officer in
17 charge shall be under the direction and control of the board or
18 of the treasurer, as determined by the board of directors. The
19 membership officer or the officer in charge shall have the
20 authority to approve applications for membership under such
21 conditions as the directors may prescribe; except that such
22 membership officer or officer in charge so authorized shall
23 submit to the directors at each monthly meeting a list of
24 approved or pending applications for membership received since
25 the previous monthly meeting, together with such other related
26 information as the bylaws or the board may require. The
27 directors shall have general management of the affairs of the
28 credit union and are specifically required:
29 * * *
30 C. The directors may appoint from their own number an
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1 executive committee of not less than three directors, who may be
2 authorized to act for the board in all respects, subject to such
3 conditions and limitations as prescribed by the board.
4 Section 5 4. Section 13 of the act, amended December 14, <--
5 1967 (P.L.733, No.342), is amended to read:
6 Section 13. Credit Committee.--The credit committee shall
7 have the supervision of all loans to members other than mortgage
8 loans and loans to other credit unions and Federal credit
9 unions. Applications for loans shall be in writing on a form
10 prepared for that purpose by the credit committee, and all
11 applications shall set forth the purpose for which the loan is
12 desired, the security, if any, offered, and such other data as
13 may be required. Within the meaning of this section, a pledge of
14 shares in the credit union or the endorsement of a note may be
15 deemed security. At least a majority of the members of the
16 credit committee shall pass on all loans, and no loan shall be
17 approved unless it is approved unanimously by the members of the
18 credit committee present: Provided, That the credit committee
19 may appoint one or more loan officers, and delegate to [him or
20 them] such person the power to approve [unsecured] loans, [up to
21 seven hundred fifty dollars ($750) or lesser amount established
22 by the board of directors for this purpose, and in excess of
23 such limit if such excess is fully secured by unpledged shares]
24 share withdrawals, releases and substitutions of security,
25 within limits specified by the committee. Each loan officer
26 shall furnish to the credit committee a record of each loan
27 approved or not approved by [him] such person within seven days
28 of the date of the filing of the application therefor. All loans
29 not approved by a loan officer shall be acted upon by the credit
30 committee. No individual shall have authority to disburse funds
19750H1959B3415 - 5 -
1 of the credit union for any loan which has been approved by [him
2 in his] such individual in their capacity as loan officer. Not
3 more than one member of the credit committee may be appointed as
4 loan officer. The credit committee shall meet as often as may be
5 necessary after due notice to each member.
6 Section 6 5. Clauses (a), (b) and (e) of section 14 and <--
7 subsection C of section 16 are amended and a subsection is added
8 to section 16 to read:
9 Section 14. Supervisory Committee.--The duties of the
10 supervisory committee shall be as follows:
11 (a) To make at least an annual examination of the affairs of
12 the credit union. [at least quarterly, including an audit of its
13 books, and, in the event, the committee feels such action to be
14 necessary, it shall call the members of the credit union
15 together thereafter and submit its report to them.] The
16 committee shall submit a report to the board of directors and to
17 the members at the next annual meeting of the credit union.
18 [(b) To make an annual audit and report and submit it at the
19 annual meeting of the members of the credit union.]
20 * * *
21 (e) Whenever the supervisory committee fails to make the
22 examinations, or reports [and audits,] as provided in clauses
23 (a) [and (b)] of this section, the board of directors shall
24 remove from office the members of the supervisory committee and
25 appoint a new committee to make such examinations, [and audits]
26 or the board may employ the services of a public accountant to
27 make such examinations. [and audits.] The charges for the
28 services of such public accountants shall be paid by the credit
29 union. If the board of directors under such circumstances fails
30 or refuses to act, the Department of Banking may remove the
19750H1959B3415 - 6 -
1 members of the supervisory committee and issue an order on the
2 board of directors requiring such examinations [and audits] to
3 be made by a public accountant at the expense of the credit
4 union.
5 Section 16. Joint Accounts.--* * *
6 C. [This section shall not be construed to affect share <--
7 accounts in the names of a husband and his wife.] The co-owner <--
8 of a joint account may, with consent of the credit union, give
9 said credit union written notice not to honor any or all
10 requests for withdrawal of shares of any other co-owner of the
11 joint account.
12 D. This section, excepting subsection C, shall not be
13 construed to affect share accounts in the names of a husband and
14 his wife.
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