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LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 710
Introduced by Dungan, 26.
Read first time January 18, 2023
Committee: Banking, Commerce and Insurance
1 A BILL FOR AN ACT relating to the Credit Union Act; to amend sections
2 21-1701, 21-1702, 21-1705, 21-1725.01, 21-1729, 21-1737, 21-1743,
3 21-1749, 21-1767, 21-1769, 21-17,102, and 21-17,109, Reissue Revised
4 Statutes of Nebraska; to define and redefine terms; to change
5 provisions relating to establishing branches, articles of
6 association, bylaws, principal place of business, records,
7 membership, meetings, boards of directors, interest rates, credit
8 committees, authorized investments, and mergers or consolidations;
9 to provide for associate directors; to harmonize provisions; to
10 repeal the original sections; and to outright repeal section
11 21-1788, Reissue Revised Statutes of Nebraska.
12 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 21-1701, Reissue Revised Statutes of Nebraska, is
2 amended to read:
3 21-1701 Sections 21-1701 to 21-17,115 and sections 3 and 12 of this
4 act shall be known and may be cited as the Credit Union Act.
5 Sec. 2. Section 21-1702, Reissue Revised Statutes of Nebraska, is
6 amended to read:
7 21-1702 For purposes of the Credit Union Act, the definitions found
8 in sections 21-1703 to 21-1722 and section 3 of this act shall be used.
9 Sec. 3. Associate director shall mean an individual appointed by a
10 credit union board to the position described in section 12 of this act.
11 Sec. 4. Section 21-1705, Reissue Revised Statutes of Nebraska, is
12 amended to read:
13 21-1705 Credit union shall mean a cooperative, not-for-profit
14 nonprofit corporation organized under the Credit Union Act for purposes
15 of educating and encouraging its members in the concept of thrift,
16 creating a source of credit for provident and productive purposes, and
17 carrying on such collateral activities as are set forth in the act.
18 Sec. 5. Section 21-1725.01, Reissue Revised Statutes of Nebraska, is
19 amended to read:
20 21-1725.01 (1) Upon receiving an application to establish a new
21 credit union, a public hearing shall be held on each application. Notice
22 of the filing of the application shall be published by the department for
23 three weeks in a legal newspaper published in or of general circulation
24 in the county where the applicant proposes to operate the credit union.
25 The date for hearing the application shall be not less than thirty days
26 after the last publication of notice of hearing and not more than ninety
27 days after filing the application unless the applicant agrees to a later
28 date. Notice of the filing of the application shall be sent by the
29 department to all financial institutions located in the county where the
30 applicant proposes to operate.
31 (2) A credit union may establish one or more branches in this state
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1 with the approval of the director.
2 (3) A credit union which has a main chartered office or approved
3 branch located in this state may, upon notification to the department,
4 establish savings account programs at any elementary or secondary school,
5 whether public or private, that has students who reside in the same city
6 or village as the main chartered office or branch of the credit union,
7 or, if the main office of the credit union is located in an
8 unincorporated area of a county, at any school that has students who
9 reside in the same unincorporated area. The savings account programs
10 shall be limited to the establishment of individual student accounts and
11 the receipt of deposits for such accounts.
12 (2) When application is made to establish a branch of a credit
13 union, the director shall hold a hearing on the matter if he or she
14 determines, in his or her discretion, that the condition of the applicant
15 credit union warrants a hearing. If the director determines that the
16 condition of the credit union does not warrant a hearing, the director
17 shall publish a notice of the filing of the application in a newspaper of
18 general circulation in the county where the proposed branch would be
19 located. If the director receives any substantive objection to the
20 proposed credit union branch within fifteen days after publication of
21 such notice, he or she shall hold a hearing on the application. Notice of
22 a hearing held pursuant to this subsection shall be published for two
23 consecutive weeks in a newspaper of general circulation in the county
24 where the proposed branch would be located. The date for hearing the
25 application shall be not less than thirty days after the last publication
26 of notice of hearing and not more than ninety days after the filing of
27 the application unless the applicant agrees to a later date.
28 (3) The director may, in his or her discretion, hold a public
29 hearing on amendments to a credit union's articles of association or
30 bylaws which are brought before the department.
31 (4) The expense of any publication required by this section shall be
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1 paid by the applicant but payment shall not be a condition precedent to
2 approval by the director.
3 Sec. 6. Section 21-1729, Reissue Revised Statutes of Nebraska, is
4 amended to read:
5 21-1729 (1) A credit union may change its principal place of
6 business within this state upon written notice to, and approval by, the
7 director. The written notice may be delivered to the department in person
8 or sent by regular or electronic mail.
9 (2) A credit union may maintain automatic teller machines and point-
10 of-sale terminals at locations other than its principal office pursuant
11 to section 8-157.01.
12 Sec. 7. Section 21-1737, Reissue Revised Statutes of Nebraska, is
13 amended to read:
14 21-1737 (1) A credit union shall maintain all books, records,
15 accounting systems, and procedures in accordance with the rules and
16 regulations as the director from time to time may prescribe.
17 (2) Credit unions shall preserve or keep their records or files, or
18 photographic or microphotographic copies thereof, for a period of not
19 less than six years after the first day of January of the year following
20 the time of the making or filing of such records or files except as
21 provided in subsection (3) of this section.
22 (3)(a) Ledger sheets showing unpaid balances in favor of members of
23 credit unions shall not be destroyed unless the credit union has remitted
24 such unpaid balances to the State Treasurer in accordance with the
25 Uniform Disposition of Unclaimed Property Act. Credit unions shall retain
26 a record of every such remittance for ten years following the date of
27 such remittance.
28 (b) Corporate records that relate to the corporation or the
29 corporate existence of the credit union shall not be destroyed.
30 (4) A credit union shall not be liable for destroying records after
31 the expiration of the record retention period provided in this section
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1 except for records involved in an official investigation or examination
2 about which the credit union has received notice.
3 (5) A reproduction of any credit union records shall be admissible
4 as evidence of transactions with the credit union as provided in section
5 25-12,112.
6 Sec. 8. Section 21-1743, Reissue Revised Statutes of Nebraska, is
7 amended to read:
8 21-1743 (1) The membership of a credit union shall consist of the
9 subscribers to the articles of association and such persons, societies,
10 associations, partnerships, and corporations as have been duly elected,
11 members who have subscribed for one share or more shares, have paid for
12 such share or shares in whole or in part, have paid the entrance fee
13 provided in the bylaws, and have complied with such other requirements as
14 the articles of association and bylaws may specify. For purposes of
15 obtaining a loan and to vote at membership meetings, a member, to be in
16 good standing, must own at least one fully paid share. Credit union
17 organization shall be limited to groups of both large and small
18 membership having a common bond of occupation or association, including
19 religious, social, or educational groups, employees of a common employer,
20 persons or organizations within a geographically defined community,
21 neighborhood, or rural district, or members of a fraternal, religious,
22 labor, farm, or educational organization and the members of the immediate
23 families of such persons.
24 (2) A person having been duly admitted to membership, having
25 complied with the Credit Union Act, the articles of association, and the
26 bylaws, having paid the entrance fee, and having paid for at least one
27 share, shall retain full rights and privileges of membership for life
28 unless that membership is terminated by withdrawal or expulsion in the
29 manner provided by the act.
30 Sec. 9. Section 21-1749, Reissue Revised Statutes of Nebraska, is
31 amended to read:
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1 21-1749 The annual meeting and any special meeting of the members of
2 the credit union shall be held in accordance with the bylaws. A special
3 meeting of the members of the credit union may be called by the members
4 or by the board of directors as provided in the bylaws. A credit union
5 shall give notice of the time and place or virtual conferencing platform
6 by which members can participate and interact for of any meeting of its
7 members. In the case of a special meeting, the notice of such special
8 meeting shall state the purpose of the meeting and the notice shall be
9 given at least ten calendar days prior to the date of such special
10 meeting.
11 Sec. 10. Section 21-1767, Reissue Revised Statutes of Nebraska, is
12 amended to read:
13 21-1767 (1) The board of directors shall have regular meetings as
14 often as necessary but not less frequently than six meetings annually
15 with at least one meeting in each calendar quarter. A new credit union
16 shall have regular meetings as often as necessary but not less frequently
17 than once each month for the first five years of the existence of the
18 credit union. once a month unless otherwise approved by the Director of
19 Banking and Finance. Special meetings of the board may be called as
20 provided in the bylaws.
21 (2) Unless the articles of association or bylaws provide otherwise,
22 the board of directors may permit any or all directors to participate in
23 a regular or special meeting by, or conduct the meeting through the use
24 of, any means of communication by which all directors participating may
25 simultaneously hear each other during the meeting. A director
26 participating in a meeting by this means shall be deemed to be present in
27 person at the meeting.
28 (3) If the Director of Banking and Finance deems it expedient, he or
29 she may call a meeting of the board of directors of any credit union, for
30 any purpose, by giving notice to the directors of the time, place, and
31 purpose thereof at least three business days prior to the meeting, either
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1 by personal service or by registered or certified mail sent to their
2 last-known addresses as shown on the credit union books.
3 (4) A full and complete record of the proceedings and business of
4 all meetings of the board of directors shall be recorded in the minutes
5 of the meeting.
6 Sec. 11. (1) The board of directors of a credit union may, in its
7 discretion, appoint one or more associate directors to serve in an
8 advisory capacity. The board shall prescribe the duties of an associate
9 director and the manner in which associate directors are appointed and
10 removed. The board shall not delegate to associate directors any of the
11 duties or responsibilities prescribed by the Credit Union Act or other
12 applicable law to be performed by the directors duly elected by the
13 members. An associate director shall not be deemed or considered to be a
14 director for any purpose under the act.
15 (2) Before appointing an associate director, the board shall confirm
16 that the person meets all of the requirements to serve as a director.
17 (3) An associate director may participate in meetings of the board
18 but may not vote or otherwise act as a director. With respect to any
19 issue that comes before the board for deliberation, the board may request
20 that any associate director in attendance leave the meeting of the board
21 and any associate director in attendance shall immediately comply with
22 the request.
23 (4) The board shall require each associate director to sign a
24 confidentiality or nondisclosure agreement to ensure that information
25 concerning the credit union remains confidential.
26 Sec. 12. Section 21-1769, Reissue Revised Statutes of Nebraska, is
27 amended to read:
28 21-1769 (1) The credit committee shall have the general supervision
29 of all loans to members and may approve or disapprove those loans subject
30 to written policies established by the board of directors.
31 (2) A credit manager having the same authority as a credit committee
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1 may be appointed in lieu of a credit committee as prescribed in the
2 bylaws. The president may serve as the credit manager.
3 (3) The board of directors may appoint one or more loan officers and
4 necessary assistants.
5 (4) The loan officers shall act under the direction of the president
6 or the president's designee.
7 (5) The loan officer or credit manager may approve or disapprove
8 loans, lines of credit, or advances from lines of credit and approve
9 withdrawals of obligated members only as prescribed in writing by the
10 board of directors.
11 (6) All loans approved by the loan officer shall be reviewed by the
12 credit committee during one of its regular meetings.
13 (7) If the board of directors appoints a credit manager in lieu of a
14 credit committee, all such loans approved by loan officers shall be
15 reviewed by the credit manager.
16 (8) Other duties and responsibilities of the credit committee or
17 credit manager may be prescribed in the bylaws.
18 Sec. 13. Section 21-17,102, Reissue Revised Statutes of Nebraska, is
19 amended to read:
20 21-17,102 (1) Funds not used in loans to members may be invested:
21 (a) In securities, obligations, or other instruments of or issued by
22 or fully guaranteed as to principal and interest by the United States of
23 America or any agency or instrumentality thereof or in any trust or
24 trusts established for investing directly or collectively in the same;
25 (b) In securities, obligations, or other instruments of any state of
26 the United States, the District of Columbia, the Commonwealth of Puerto
27 Rico, and the several territories organized by Congress or any political
28 sub