AB 2062

Bill Subjects

Abstract

(1) Existing law, the California Credit Union Law, provides for the regulation of credit unions by the Commissioner of Financial Protection and Innovation, and specifies requirement for the management and operation of credit unions. Existing law specifies the manner of deposit for the savings capital of a credit union, prohibits a credit union from entering into an obligation with any official that exceeds 20% of the aggregate dollar amount of all savings capital, and prohibits a credit union policy from permitting a credit union to enter into obligations with a member where the total obligations of the member exceeds 10% of the aggregate dollar amount of the credit union's savings capital. A willful violation of the California Credit Union Law is a crime. This bill would define "savings capital" for purposes of those provisions. (2) Existing law grants specified powers to the board of directors of a credit union, including the power to approve new membership, determine the interest rate on obligations with members, and declare dividends on shares and determine the interest rate paid on certificates for funds. This bill would authorize the directors or their delegates to utilize an automated system to be used to establish membership eligibility pursuant to a written membership plan adopted by the board of directors if specified conditions are met, including that the automated system is regularly tested for compliance with specified provisions, including the credit union's field of membership, and applicable laws and regulations. The bill would authorize the board to delegate specified duties to an asset-liability management committee or similar committee, including the duty to determine the interest rate on obligations with members, declare dividends on shares and determine the interest rate paid on certificates for funds, and determine the dividend rates on share accounts, as specified. (3) Existing law authorizes a credit union to invest in the shares of stock of a corporation or limited liability company organized for the purposes of providing services to credit unions, provided the corporation or limited liability company is formed by a credit union. This bill would also authorize a credit union to invest in those entities if the corporation or limited liability company is formed by a corporation or limited liability company organized solely for the purpose of providing services to credit unions pursuant to the above specified provisions. The bill would define "credit union service organization." (4) Existing law prohibits an officer, director, or employee of a credit union from purchasing, or being interested in the purchase of, the credit union's assets for an amount less than their current market value. Existing law makes a person who violates that provision liable for each offense in a specified amount. This bill would revise the amount for which the person is liable. The bill would authorize a method for determining market value and would exclude from those prohibitions certain gifts from a credit union and the purchase of certain equipment or furnishings by an officer or director. (5) Existing law prohibits an officer, director, or employee of a credit union from purchasing, or being interested in the purchase of, the credit union's obligations for an amount less than their book value, unless specified requirements are met. Existing law makes a person who violates those provisions liable for each offense in a specified amount. This bill would revise the amount for which the person is liable. The bill would set forth a method for determining book value. (6) Existing law requires the members of a credit union to hold an annual meeting for the election of directors and certain committees and authorizes special meetings of members to be held upon order of the board of directors in accordance with specified notice and other requirements. This bill would authorize those meetings to be conducted by remote communication, as specified. By expanding the scope of a crime, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.