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The Oregon Administrative Rules contain OARs filed through June 15, 2014
 
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DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,
DIVISION OF FINANCE AND CORPORATE SECURITIES

 

DIVISION 710

CREDIT UNIONS (IN GENERAL)

 441-710-0000

Definitions

As used in Oregon Administrative Rules chapter 441, divisions 710 and 720:

(1) "Abandoned premises" means former credit union premises from the date of relocation to new quarters, and property originally acquired for future expansion for which such use is no longer contemplated.

(2) "Banker's acceptance" means a time draft that is drawn on and accepted by a bank and that represents an irrevocable obligation of the bank.

(3) "Borrowing repurchase transaction" means a transaction in which the credit union agrees to sell a security to a counterparty and to repurchase the same or an identical security from that counterparty at a specified future date and at a specified price.

(4) "CUSO" or "credit union service organization" means an agency, association or corporation in which a credit union is authorized by ORS 723.602(5) to invest or to which it is authorized by 723.602(5) to loan funds. A CUSO may be organized for one or more of the purposes described in 723.006 or 723.602(5).

(5) "Eligible obligation" means a loan or group of loans.

(6) "Federal funds transaction" means a short-term or open-ended unsecured transfer of immediately available funds by one depository institution to another depository institution or entity.

(7) "Fixed assets" means premises and furniture, fixtures and equipment.

(8) "Furniture, fixtures and equipment" means all office furnishings (e.g., tables, chairs, desks, file cabinets, curtains, drapes, rugs, etc.), office machines, computer hardware and software, automated terminals, heating and cooling equipment.

(9) "Investment in fixed assets" means:

(a) Any investment in real property (improved or unimproved) which is being used or is intended to be used as premises;

(b) Any leasehold improvement on premises;

(c) The aggregate of the lease payments pursuant to a lease agreement on fixed assets; or

(d) Any investment in furniture, fixtures and equipment.

(10) "Investment repurchase transaction" means a transaction in which an investor agrees to purchase a security from a counterparty and to resell the same or an identical security to that counterparty at a specified future date and at a specified price.

(11) "Members of the immediate family" means:

(a) All of the following relatives of the member: grandparents, parents, spouse, children, stepchildren, grandchildren, brothers, sisters, half-brothers, half-sisters, aunts and uncles;

(b) The domestic partner of a member provided the domestic partner and the primary member attest that the following conditions apply:

(A) They share the same regular and permanent address;

(B) Have a close personal relationship; and

(C) Have agreed to be jointly responsible for basic living expenses and each others common welfare; and

(c) The immediate family members of those persons described in subsections (11)(a) and (11)(b) of this rule.

(12) "Mobile facility" means a movable physical facility held out by the credit union as a place of business.

(13) "NCUA" means the National Credit Union Administration.

(14) "Paid-in and unimpaired capital and surplus" means shares and deposits plus post-closing, undivided earnings, but does not include regular reserves or special reserves required by statute, administrative rule or special agreement between the credit union and the director or its share insurer.

(15) "Premises" means any office, branch office, service center, parking lot, other facility or real estate where the credit union transacts or will transact business.

(16) "Student loan" means a loan granted to finance attendance at an institution of higher education or at a vocational school, which is secured by and on which payment of the outstanding principal and interest has been deferred in accordance with the insurance or guarantee of the federal government, a state government, or any agency of either.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.152, 723.156 & 723.172
Hist.: BB 4-1982, f. 8-24-82, ef. 9-1-82; BB 1-1984, f. & ef. 2-8-84; Renumbered from 805-072-0005; FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0010 [Renumbered to 441-710-0500]

441-710-0015 [Renumbered to 441-710-0505]

Membership

441-710-0020

Membership in General

The rules in this section create procedures for establishing and expanding the membership of a credit union. These rules do not invalidate or change the field of membership of any credit union approved prior to March 31, 2000.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.172
Hist.: FCS 2-1989, f. 1-18-89, cert. ef. 2-1-89; Renumbered from 805-072-0050; FCS 6-2000; f. & cert. ef. 3-31-00; FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0035

Community Charter Applications

A credit union applying for a community charter must complete an application to include at least the following information:

(1) Written authorization for the application signed by the Board of Directors.

(2) Bylaws or amendment to bylaws showing current and revised field of membership.

(3) Identification of the area the credit union wishes to serve and the total population of the proposed community. Quote source for the population figures.

(4) If the area to be served consists of more than one precinct, district, city, county, or other defined boundaries, a detailed description of how the persons in the area interact or share interests.

(5) Map of proposed well-defined local community, neighborhood or rural district.

(6) Most recent monthly financial statement, including income and expense statement; and

(7) Business plan showing how credit union will provide service to proposed community, pro forma financial statements for the first three years of operation including assumptions used, and facility locations. The plan should include information on services and products offered by the institution.

(8) If the credit union applying for a community charter wishes to continue credit union services to a former group or former groups in accordance with ORS 723.172, the credit union must comply with the application requirements set forth in OAR 441-710-0071.

Stat. Auth.: ORS 723.102
Stats Implemented: ORS 723.172(2) & 723.172(5)
Hist.: FCS 6-2000; f. & cert. ef. 3-31-00; FCS 12-2010, f. 11-29-10, cert. ef. 12-1-10

441-710-0037

Procedures for Amending Bylaws on Community Charter Field of Membership

(1) When a credit union wishes to expand its field of membership, it shall amend its bylaws to describe the geographic boundaries to be added to the field of membership. The proposed amendment to the bylaws and the application for approval of the amendment filed with the Director shall include:

(a) The bylaw that defines the field of membership of the credit union with the text of the proposed amendment to the bylaw showing the new language underlined and deleted language, if any, bracketed;

(b) Map of proposed well-defined local community, neighborhood or rural district, showing both the existing field of membership and the proposed field of membership to be added;

(c) The credit union's most recent financial statement;

(d) An updated plan of business for the credit union that takes into account the implications of the anticipated increased membership, deposits, responsibilities and effect on capital level of the credit union;

(e) An updated budget; and

(f) Any other evidence in support of the application.

(2) Any requirement in section (1) of this rule may be waived as it relates to a particular application, if the Director determines that complying with the requirement is not necessary for the purposes of carrying out the provisions of ORS Chapter 723.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.022 & 723.172(8)
Hist.: FCS 6-2000; f. & cert. ef. 3-31-00

441-710-0038 [Renumbered to 441-710-0450]

441-710-0045 [Renumbered to 441-710-0460]

441-710-0070

Procedures for Amending Bylaws on Field of Membership

(1) When a credit union wishes to expand its field of membership, it shall amend its bylaws to describe the group or groups to be added to the field of membership. The proposed amendment to the bylaws and the application for approval of the amendment filed with the Director shall include:

(a) The bylaw that defines the field of membership of the credit union with the text of the proposed amendment to the bylaw showing the new language underlined and deleted language, if any, bracketed;

(b) The credit union's most recent financial statement;

(c) An updated plan of business for the credit union that takes into account the implications of the anticipated increased membership, deposits, responsibilities and effect on capital level of the credit union;

(d) An updated budget;

(e) If the amendment proposes to add a separate employment group to the field of membership; the names and addresses of individuals who represent the group;

(f) If the amendment proposes to add a group with a separate bond of occupation or association, the credit union shall submit evidence:

(A) That the group does not contain more than 3,000 members;

(B) That the group could not feasibly or reasonably establish a new credit union due to a lack of volunteer resources, financial resources or other factors important to the likelihood of successful formation of a new credit union; or

(C) That the group proposes to transfer to the credit union in connection with a merger, consolidation or transfer approved by the director, or in connection with the liquidation of another credit union.

(g) Any other evidence in support of the application, including relevant correspondence from the group to be added.

(2) Any requirement in section (1) of this rule may be waived by the Director if the requirement is not necessary for the purposes of that application.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.022, 723.156 & 723.172
Hist.: FCS 2-1989, f. 1-18-89, cert. ef. 2-1-89; Renumbered from 805-072-0075; FCS 6-2000; f. & cert. ef. 3-31-00; FCS 2-2004, f. & cert. ef. 8-5-04; FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0071

Application to Serve Former Occupational Groups and Associational Members

(1) In accordance with ORS 723.172, all community credit unions that wish to continue credit union services to an occupational or associational group or groups shall file an application to serve the these groups on a form provided by the director. The application form shall require the community credit union to supply the following information:

(a) The credit union’s name; the date of conversion; and the communities it serves.

(b) The names of the former occupational or associational group or groups that the credit union wishes to serve and information showing that the occupational or associational group or groups have offices within the credit union’s community boundaries.

(c) Information showing that the occupational or associational group or groups were within the credit union’s field of membership before it converted to a community charter and the date when the by-laws were amended to include the occupational or associational group or groups in the credit union’s field of membership.

(d) Information showing the number of individuals within the occupational group or groups or association or associations that do not live or work within the credit union’s geographic boundaries, and the basis for credit union membership such as whether the individuals are directors, officers, employees, members, partners, personal representatives, trustees or volunteers of the corporation, limited liability company, partnership or association, trust, estate or other entity.

(e) Information showing that the credit union has the ability to serve the new credit union members who do not live or work within the community boundaries without sacrificing safety and soundness requirements including addressing the implications of how increased credit union membership, deposits, and responsibilities may effect the credit union’s capital or net worth ratio.

Stat. Auth.: ORS 723.172
Stats. Implemented: 2009 SB 438 ¦3
Hist.: FCS 12-2010, f. 11-29-10, cert. ef. 12-1-10

441-710-0075

Underserved Areas

(1) A credit union may apply to the Director to add any underserved, well-defined local community, neighborhood or rural district to its field of membership if:

(a) The area is underserved by other depository institutions; and

(b) The credit union is prepared and able to establish and maintain an office or facility within the area to be added.

(c) "Underserved by other depository institutions" means the aggregate number of depository institution branches per capita is below the state average as established by the Director on an annual basis as of December 31.

(d) "Office or facility" means a place where shares are accepted for members' accounts, loan applications are accepted and loans are disbursed. This definition includes:

(A) A credit union owned branch;

(B) A shared branch that belongs to a shared branching network;

(C) A mobile branch;

(D) An office operated on a regularly scheduled weekly basis; or

(E) A credit union owned electronic facility that meets, at a minimum, the requirements of this subsection. An ATM, by itself, does not constitute an "office or facility."

(2) A credit union applying to add an underserved area to its field of membership must complete and submit to the Director an application to include at least the following information:

(a) Copy of the Board of Director minutes approving the request for expansion to an underserved area;

(b) Bylaws or amendment to bylaws showing the current and revised field of membership;

(c) Identification of the area the credit union wishes to serve and the population of the proposed community. Quote the source for the population figures;

(d) Map of proposed area;

(e) Data and the source of that data that demonstrates the area is underserved by other depository institutions.

(f) Most recent monthly financial statement, including income and expense statement;

(g) Business plan showing how the credit union will provide service to the underserved area; and

(h) Information on the proposed office or facility location as required by ORS 723.172(7)(b).

(3) The credit union may establish that the well-defined local community, neighborhood or rural district is underserved by other depository institutions by showing that the area:

(a) Encompasses or is located in an empowerment zone or enterprise community designated under section 1391 of the Internal Revenue Code of 1986; or

(b) Meets at least one of the following objective criteria of economic distress developed by the Community Development Financial Institutions Fund:

(A) The percentage of the population living in poverty is at least 20%.

(B) The median family income shall be at or below 80% of:

(i) The Metropolitan Area median family income or the National Metropolitan Area median family income, whichever is greater for an Investment Area within a Metropolitan area; or

(ii) The statewide non-Metropolitan Area median family income or the national non-Metropolitan Area median family income, whichever is greater for an Investment Area outside a Metropolitan area;

(C) The unemployment rate as reported in the most recently completed Unemployment Rates Report by the Oregon Department of Employment or the decennial census published by the US Bureau of the Census, whichever is more current, is at least 1.5 times the national average;

(D) In areas located outside of a Metropolitan Area:

(i) The county population loss in the period between the most recent decennial census and the previous decennial census is at least 10%; or

(ii) The county net migration loss (outmigration minus inmigration) over the five year period preceding the most recent decennial census is at least 5%; or

(E) The area to be added is an "investment area", as defined in section 103(16) of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702).

(4) After the application is complete, the Director's staff will review the application, determine whether the various criteria of the Director are met and determine whether the granting of the application will adversely impact the safety and soundness of the applicant. The Director will approve or deny the application accordingly and provide the applicant with the Director's determination and the reasons for the determination.

(5) An applicant whose application is denied will have the right to a contested case hearing and rights of appeal pursuant to the provisions of ORS Chapter 183.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.172
Hist.:FCS 5-2002, f. 11-6-02 cert. ef. 11-14-02; FCS 2-2005, f. & cert. ef. 8-25-05

Supervision and Regulation

441-710-0080 [Renumbered to 441-710-0510]

441-710-0085

Guidelines for a Low-Income Designated Credit Union

(1) A credit union may be designated by the director as a low-income credit union if the director determines it is in the public interest that the director designate the credit union as a low-income credit union and the credit union demonstrates that:

(a) A majority of current members of the credit union:

(A) Make less than 80 percent of the average for all wage earners as established by the most recently published U.S. Department of Labor's Bureau of Labor Statistics;

(B) Have a household income at or below 80 percent of the median household income for the nation as established by the most recently published Census Bureau data; or

(C) Are enrolled as full-time or part-time students in a college, university, high school, or vocational school; or

(b) The community charter credit union's field of membership is limited to geographic areas in which a majority of the residents, if members of the credit union, would fall within the low income criteria described in subsection (a) of this section.

(2) A credit union designated by the director as a low-income credit union may accept:

(a) Payments from a non-member that is a natural or nonnatural person to hold shares (including deposits) in the credit union, provided:

(A) The non-member shares do not exceed the greater of 20 percent of the total number of shares of the credit union or $1,500,000, unless a greater amount has been approved by the director with NCUA concurrence; and

(B) The non-member is informed prior to a payment being made that a non-member share does not provide the holder with membership or voting rights in the credit union.

(b) Payments on secondary capital accounts if:

(A) The board of directors of the credit union has adopted and the credit union follows a written plan meeting the requirements of section (5) of this rule;

(B) The payments are from nonnatural persons, that may be non-members of the credit union, for an uninsured non-share account;

(C) The director approves the written plan;

(D) At or before the time the credit union first receives a payment on secondary capital, the credit union provides to the secondary capital account holder a written disclosure statement meeting the requirements of section (6) of this rule; and

(E) The director has not removed the designation of the credit union as a low-income credit union.

(3) Secondary capital accounts must be issued with a fixed maturity of not less than five years.

(4) A low-income credit union may use secondary capital for any purpose permitted by law.

(5) Each plan for secondary capital must include:

(a) A detailed statement specifying the credit union's need for, maximum amount of, sources and intended uses of the secondary capital;

(b) The terms of a secondary capital account, including maturity, basis for determining interest or dividend rate and calculation disclosures, withdrawal restrictions, and balance requirements;

(c) The credit union's loan and investment policies;

(d) A demonstration that the planned uses of secondary capital conform to the low-income credit union's strategic plan, business plan, and budget;

(e) A pro forma income statement and balance sheet, including any off-balance sheet items, covering a minimum of the next two years reflecting the issuance and uses of the amount of secondary capital described in subsection (a) of this section;

(f) An explanation of how the credit union will provide for liquidity to repay secondary capital upon maturity of the accounts; and

(g) A copy of the credit union's proposed disclosure statement meeting the requirements of section (6) of this rule.

(6) Each secondary capital account disclosure statement must be signed by the account holder and include:

(a) A statement that a secondary capital account does not provide the holder with membership or voting rights in the credit union;

(b) A statement that funds in a secondary capital account are not insured by the National Credit Union Share Insurance Fund or any other governmental or private entity;

(c) The terms of the secondary capital account, including the maturity, dividend rate and calculation disclosure, withdrawal restrictions and account balance requirements;

(d) A statement that the secondary capital may not be pledged as security on a loan or other obligation to the low-income credit union or any other party;

(e) A statement that funds, including interest accrued and paid into the secondary capital account, may be used, pro rata with all other secondary capital, to cover operating losses realized by the low-income credit union that exceed its net available reserves (exclusive of secondary capital and allowance accounts for loan and lease losses), and if so used, will not be restored; and

(f) A statement that any claim by a secondary capital account holder against the low-income credit union will be subordinate to all other claims, including shareholders, creditors and the National Credit Union Share Insurance Fund.

(7) Secondary capital may not be pledged by the account holder as security on a loan or other obligation to the low-income credit union or any other party.

(8)(a) A low-income credit union that issues secondary capital accounts pursuant to section (2) of this rule must record the funds on its balance sheet in an equity account entitled "uninsured secondary capital account."

(b) For accounts with remaining maturities of less than five years, the low-income credit union must reflect the net worth value of the accounts in its financial statement according to the following schedule:

(A) Four to less than five years remaining, 80% of the original balance;

(B) Three to less than four years remaining, 60% of the original balance;

(C) Two to less than three years remaining, 40% of the original balance;

(D) One to less than two years remaining, 20% of the original balance;

(E) Less than one year remaining, 0% of the original balance.

(c) The low-income credit union must reflect the full amount of the secondary capital on deposit in a footnote to its financial statement.

(9) In the event of a merger or other voluntary dissolution of the low-income credit union, other than a merger into another low-income credit union:

(a) Secondary capital accounts must be closed and paid out to the respective account holders to the extent they are not needed to cover losses at the time of merger or dissolution; and

(b) Non-member shares must be closed and paid out to the respective share holders.

(10)(a) The director may periodically review the low-income qualifications of a credit union. The designation of a credit union as a low-income credit union may be removed by the director:

(A) At the request of the credit union if the director determines that the action will not adversely affect the members of the credit union and that the action would be in the public interest; or

(B) If, following notice to the credit union and opportunity for a hearing under ORS chapter 183, the director determines that the credit union no longer meets the criteria to be a low-income credit union and that removal of the designation is in the public interest.

(b) Immediately following removal of the designation as a low-income credit union, the credit union must give written notice of the removal of the designation to all:

(A) Credit union members;

(B) Non-members holding shares; and

(C) Secondary capital account holders.

(c) The written notice to all non-members and secondary account holders must include information:

(A) That the credit union is no longer eligible to receive payments on non-member shares or secondary capital;

(B) That all non-member shares and secondary capital accounts will be closed;

(C) That all secondary capital accounts will be redeemed with no early withdrawal penalty; and

(D) Of the date of redemption, which must be 90 days after the effective date of removal of the designation as a low-income credit union, or at the maturity date of a secondary capital account, whichever occurs first.

Stat. Auth.: ORS 723.102, Sec. 5, Ch. 343, 2007 OL
Stats. Implemented: Sec. 5, Ch. 343, 2007 OL
Hist.: FCS 7-2007, f. 11-2-07, cert. ef. 1-1-08

441-710-0090 [Renumbered to 441-710-0515]

441-710-0100 [Renumbered to 441-710-0520]

441-710-0110 [Renumbered to 441-710-0525]

441-710-0120 [Renumbered to 441-710-0530]

441-710-0140 [Renumbered to 441-710-0535]

441-710-0160 [Renumbered to 441-720-0200]

441-710-0180 [Renumbered to 441-720-0215]

441-710-0190 [Renumbered to 441-720-0220]

441-710-0200 [Renumbered to 441-720-0225]

441-710-0220 [Renumbered to 441-720-0230]

Powers

441-710-0240

Limitations on Ownership of Fixed Assets

Under ORS 723.152(4), a credit union has the power to acquire, lease, hold and dispose of property necessary or incidental to its operations. A credit union's ownership of fixed assets is limited as described by OAR 441-710-0240 to 441-710-0270.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.152
Hist.: BB 4-1982, f. 8-24-82, ef. 9-1-82; Renumbered from 805-072-0305; FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0260

Investment in Fixed Assets

(1) A credit union shall not, without the prior approval of the Director, invest in fixed assets if the aggregate of all such investments exceeds five percent of total assets.

(2) A credit union shall submit such statements and reports as the Director may require in support of a request for approval of an investment in fixed assets in excess of the limit specified by section (1) of this rule. Such reports and statements shall include, but need not be limited to:

(a) A narrative, describing the proposal in terms of costs, usage, location and method of financing;

(b) Current financial data; and

(c) A pro forma projected balance sheet and statements of income and expenses for each of the ensuing three years based upon the assumption that the proposal will be approved.

(3) If the Director determines that the proposal will not adversely affect the credit union, an aggregate dollar amount or percentage of assets will be approved for investment in fixed assets for that credit union.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.152
Hist.: BB 4-1982, f. 8-24-82, ef. 9-1-82; Renumbered from 805-072-0315; FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0270

Investment in Premises

(1) When real property is acquired for future expansion, at least partial utilization should be accomplished within a reasonable period, which shall not exceed three years unless otherwise approved in writing by the Director.

(2) When a credit union acquires unimproved real property for future expansion, the credit union shall at least partially utilize the property within a reasonable period of time, not to exceed six years unless otherwise approved in writing by the Director.

(3) After real property acquired for future expansion under sections (1) or (2) of this rule has been held for one year, a board resolution with definitive plans for utilization must be available for inspection by the Director's examiners.

(4) Investments in premises will be recorded on the credit union's books in accordance with generally accepted accounting principles. The cost of land shall be carried on the books of the credit union in an account separate from the cost of improvements thereon.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.152
Hist.: BB 4-1982, f. 8-24-82, ef. 9-1-82; Renumbered from 805-072-0320; FCS 2-2005, f. & cert. ef. 8-25-05; FCS 1-2013(Temp), f. 1-4-13, cert. ef. 2-1-13 thru 7-31-13; FCS 3-2013, f. & cert. ef. 7-19-13

441-710-0325

Housing Agency Low Income Rental Housing Fund Client Trust Accounts

(1) Every financial institution as defined in ORS 706.008, authorized by law to offer client trust accounts established pursuant to ORS 696.241 and to accept deposits to such accounts in Oregon may:

(a) Make available to its depositors, client trust accounts, hereafter designated as Housing Agency Low Income Rental Housing Fund Accounts ("Housing Fund Accounts"); and

(b) Pay interest on all funds deposited in each Housing Fund Account at the same rate payable on similar accounts.

(2) Each Housing Fund Account shall be created and maintained according to written agreement between the financial institution and participating depositor. Each agreement shall authorize the financial institution to pay all interest earned, net of fees and expenses imposed by the financial institution, to the Housing Agency Low Income Rental Housing Fund designated in Chapter 916, Oregon Laws 1989 and Chapter 716, Oregon Laws 1991.

(3) Fees and Expenses:

(a) Each Housing Fund Account may be subject to fees and expenses which are reasonable and are customarily assessed by the financial institution for similar accounts;

(b) In no event shall a financial institution collect fees and expenses from a Housing Fund Account in excess of earned interest.

(4) Interest Remittances and Reports:

(a) Each participating financial institution shall remit to the Housing Agency any interest earned on each Housing Fund Account, net of reasonable fees and expenses. Remittance, if any, shall be made at least quarterly;

(b) Remittance may be made in a single aggregate installment representing net interest payable from all Housing Fund Accounts maintained by the financial institution;

(c) Each participating financial institution shall report to the Housing Agency information as to every Housing Fund Account maintained by the financial institution. The information shall be in writing and include identity of the Housing Fund Account by name, account number, interest earned, fees and charges, and net interest remitted, if any. Reports shall be made at least quarterly and may accompany any remittances.

(5) If a financial institution is required to produce tax information returns (Form 1099), the financial institution shall designate the State of Oregon Housing Agency Low Income Rental Housing Fund, as payee or recipient. Tax identification information shall be provided by the Housing Agency to participating financial institutions upon request.

Stat. Auth.: ORS 723.102
Stats. Implemented: Ch. 916 OL 1989 & Ch. 716 OL 1991
Hist.: FCS 8-1989, f. 12-14-89, cert. ef. 1-1-90; FCS 2-2005, f. & cert. ef. 8-25-05

Reserves

441-710-0400

Loans to Officials

(1) Any single loan to a person described in ORS 723.532(2) or the aggregate of all outstanding loans for which such person is directly or indirectly obligated to repay which exceeds $100,000 shall be approved by the Board of Directors.

(2) If the credit union has a staff of three persons or less, all loans to a person described in ORS 723.532(2) shall be approved by the Board of Directors.

(3) This rule shall not apply to loans secured by share or deposit accounts.

Stat. Auth.: ORS 723.532
Stats. Implemented: ORS 723.532
Hist.: FCS 3-2001, f. & cert. ef. 2-13-01; FCS 2-2005, f. & cert. ef. 8-25-05

Mergers

441-710-0450

Mergers of Community Charters

(1) A community charter credit union may not merge into an occupational or associational credit union unless:

(a) The situation involves a well-defined local community, neighborhood or rural district that is underserved by other depository institutions as referenced in ORS 723.172(7)(a) or is an emergency merger under section (2) of this rule.

(b) The merger does not impact the safety and soundness of the continuing credit union; and

(c) The continuing credit union maintains a service facility within the community boundaries. "Service Facility" means a place where shares are accepted for members' accounts, loan applications are accepted, and loans are disbursed. This definition includes a credit union owned branch, a shared branch that belongs to the shared branching network, a mobile home, an office operated on a regularly scheduled weekly basis, or a credit union owned electronic facility that meets, at a minimum, these requirements. It does not include an ATM.

(2) For purposes of this rule, "emergency merger" involves the director's determination that:

(a) A credit union is insolvent or likely to become insolvent;

(b) Expeditious action is necessary;

(c) Other reasonable alternatives are not available; and

(d) The public interest would best be served by approving the merger.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.172 & 723.682
Hist.: FCS 6-2000; f. & cert. ef. 3-31-00; FCS 2-2004, f. & cert. ef. 8-5-04; Renum bered from 441-710-0038, FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0460

Notice to Members of Merger Plan

(1) After approval of a plan of merger by the board of directors of two or more credit unions, the plan of merger, in summary form, must be presented to the members of the merging credit union(s) prior to the affirmative vote required by ORS 723.682. Unless waived by the director, the summary of the merger plan must contain the following, as applicable:

(a) Current financial reports for each credit union, consisting of the most currently filed NCUA Form 5300 pages reflecting assets and liabilities, income and expenses, and net worth ratio;

(b) A combined financial report as submitted to the director;

(c) An analysis of share values, and any proposed share adjustments;

(d) An explanation of any changes concerning insurance of member accounts;

(e) The reason(s) for the merger;

(f) The name and location of the continuing credit union, including branches, expected to be open after the merger;

(g) A description of the organization of the continuing credit union board of directors and the identity, if known, of its members and committees;

(h) An explanation of any new or expanded products and services to be made available to members, and any services or products expected to be discontinued, as a result of and expected to be effective within 30 days of the closing date of the merger;

(i) A statement of whether any senior management officials (vice president level and above) of the merging credit union are subject to employment agreements, deferred compensation agreements, or other employee benefit arrangements not offered to employees generally, and if so, whether any such agreements or arrangements contain provisions effecting compensation or benefits changes in the event of a merger;

(j) A statement of whether any agreements, plans or arrangements identified in subsection (1)(i) will be modified or superseded in connection with the merger, or whether any senior management officials (vice president and above) of the merging credit union will be offered new employment agreements, deferred compensation arrangements, incentive plans, retirement packages or other employee benefit arrangements not offered to employees generally. Provide a summary description of the arrangements identified in this subsection, disclosed in the aggregate, and not by individual employee, with a brief explanation of how such arrangements differ from existing arrangements of such employees; and

(k) An estimate itemized by general categories of the cost of the merger.

(2) Before dissemination to the members, the merger plan summary described in section (1) will be made available for inspection by the director or the director's employees at the offices of the credit union(s) or by viewing a web site maintained by the credit union(s) to which the director is provided access. The credit union(s) will notify the director when the merger plan summary becomes available for review. The credit union may disseminate the merger plan summary to the members at the time the director grants preliminary approval of the merger or five business days after the merger plan summary is made available for inspection by the director, whichever is later.

(3) The summary may be communicated to members by means of:

(a) United States postal mail;

(b) Electronic mail;

(c) Facsimile;

(d) Access to an Internet web page which may be password-protected if deemed necessary by the credit union;

(e) Permitting members to pick up materials at a main or branch office; or

(f) Any other method identified by the credit union and approved by the director that allows for access by the members to the information.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.682
Hist.: FCS 5-2004, f. & cert. ef. 11-30-04; Renumbered from 441-710-0045, FCS 2-2005, f. & cert. ef. 8-25-05

Supervision and Regulation

441-710-0500

Fees and Charges Credit Unions Pay the Director

(1) Effective March 8, 2011, the annual regulatory fee under ORS 723.114(1), which is due and payable on April 1 of each calendar year, by each credit union, with assets of:

(a) Less than $10 million, is $250 plus .000163 of all assets;

(b) $10 million or more but less than $20 million, is $1110 plus .000197 of all assets;

(c) $20 million or more but less than $50 million, is $1170 plus .000188 of all assets;

(d) $50 million or more but less than $100 million, is $1350 plus .000178 of all assets;

(e) $100 million or more but less than $200 million, is $7100 plus .000125 of all assets;

(f) $200 million or more but less than $500 million, is $7900 plus .000120 of all assets;

(g) $500 million or more but less than $1 billion, is $9400 plus .000116 of all assets;

(h) $1 billion or more but less than $2 billion, is $10,400 plus .000115 of all assets;

(i) $2 billion or more is $12,400 plus .000113 of all assets.

(j) If the credit union is a corporate credit union, the fee schedule is $16,800 plus .0000345 of all assets.

(2) The rate of charge payable by a credit union is $75 an hour for each examiner used in an examination for extra services provided a credit union under ORS 723.114(2).

(3) Notwithstanding the rate of charge fixed by section (2) of this rule:

(a) If an examiner from the division or the Supervisor is required to travel out of state for an examination or to provide extra service, the rate of charge payable by the credit union is $75 an hour per person, plus actual expenses for travel and subsistence;

(b) If the examination or the extra service is performed by a consultant hired by contract for the particular work, the charge payable by the credit union is the actual cost to the division of the contract consultant.

(4) In addition to the charges fixed by sections (2) and (3) of this rule, the Director will collect from a credit union any additional costs directly attributable to extra services given the credit union under ORS 723.114(2).

(5) As used in this rule:

(a) "Assets" means the average value of total assets reported by the credit union for the four calendar quarters for the year immediately preceding the due date of the fee. However, if a credit union was not in existence or doing business in this state during all of the prior calendar year "assets" means the average assets reported on the quarterly reports for the quarters for which reports were required to be filed during the calendar year immediately preceding the due date of the fee.

(b) "Extra service" means any special examination or examination in connection with a conversion.

(6) The annual regulatory fee of a credit union that is party to a merger or conversion, or is liquidated or dissolved:

(a) Is not subject to refund in whole or in part if the merger, conversion, liquidation or dissolution occurs prior to the end of the calendar years for which a fee has been paid;

(b) Is not subject to pro ration if the credit union operated during any part of the calendar year during which the merger, conversion, liquidation or dissolution occurred.

(7) An application for a credit union charter under ORS 723.012 must be accompanied by a fee of $350.

(8) An application to establish an additional place of business under ORS 723.032 must be accompanied by a fee of $300.

(9) The Director may by order reduce the fees assessed for any specific year.

Stat. Auth.: ORS 705.620, 723.012, 723.032, 723.102 & 723.532
Stats. Implemented: ORS 723.114 & 723.532, Ch. 343, 2007 OL
Hist.: FID 9-1985, f. & ef. 12-31-85; FCS 2-1988, f. 1-29-88, cert. ef. 2-1-88; Renumbered from 805-072-0010; FCS 1-1989, f. 1-18-89, cert. ef. 2-1-89; FCS 1-1991, f. 1-28-91, cert. ef. 2-15-91; FCS 3-1994, f. 2-1-94, cert. ef. 2-15-94; Administrative correction 9-29-97; FCS 3-2000, f. & cert. ef. 3-9-00; FCS 3-2001, f. & cert. ef. 2-13-01; FCS 1-2005(Temp), f. & cert. ef. 3-4-05 thru 8-30-05; Renumbered from 441-710-0010, FCS 2-2005, f. & cert. ef. 8-25-05; FCS 1-2008, f.& cert. ef. 1-28-08; FCS 3-2011, f. 3-7-11, cert. ef. 3-8-11

441-710-0505

Amendment and Late Charge Fees

(1) The fees for amendments authorized by ORS 723.022 are as follows for each submission:

(a) Amendment of articles of incorporation, $25;

(b) Amendment of bylaws, $25.

(2) The following charges apply to late reports filed by the credit union with the director. The fine is for each day the report is late:

(a) Quarterly call reports; $100;

(b) Supervisory Committee Report, $10;

(c) Examination report reply, $10;

(d) Monthly reports when required by the director, $10. The reports may include, but are not limited to:

(A) Financial statement, including income and expenses;

(B) Board of Director minutes.

Stat. Auth.: ORS 723.022 & 723.106
Stats. Implemented: ORS 723.022 & 723.106
Hist.: FCS 5-1991(Temp), f. & cert. ef. 9-30-91; FCS 6-1991, f. 10-29-91, cert. ef. 11-1-91; Renumbered from 441-710-0015, FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0510

Annual Audit; Qualified Persons to Perform; Content; Time for Filing, Reporting Action Taken

(1) The person performing the comprehensive annual audit required by ORS 723.322 must be qualified by knowledge and experience to perform credit union audits and must be approved by the Director as so qualified.

(2) The audit should test whether or not the accounting systems and methods used by the credit union, and the accounts of the credit union, accurately reflect the condition of the business. The auditor shall prepare the audit report in accordance with the guidelines furnished by the Director. The audit report shall include a management letter; and the management letter shall include, but need not be limited to:

(a) An evaluation of the soundness of the credit union;

(b) An evaluation of its internal controls;

(c) The state of its compliance with applicable statutes and rules; and

(d) An evaluation of the extent and effectiveness of its use of generally accepted accounting principles.

(3) A copy of the audit, including the management letter, shall be filed with the Director by the auditor within 30 days after the report is delivered to the credit union. Within 65 days after the audit report is received by the credit union, the credit union shall report to the Director the action it has taken or is taking in response to the report.

(4) Each credit union must file a notice with the director within 15 days after the engagement of a new independent auditor, or the resignation or dismissal of the independent auditor previously engaged. The notice must include the reasons for the event in reasonable detail.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.322
Hist.: BB 4-1982, f. 8-24-82, ef. 9-1-82; Renumbered from 805-072-0150; Renumbered from 441-710-0080, FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0515

Required "Additional Reports" Defined

(1) As used in ORS 723.106(1), "additional reports" includes call reports of condition, lists of officers and other management officials, Supervisory committee audits, management letters, liquidity reserve reports, and other reports required by the Director.

(2) If a credit union is investing in or has loans outstanding to a CUSO, "additional reports" as used in ORS 723.106(1) includes reports and other information of the CUSO of the kinds described by section (1) of this rule.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.106
Hist.: BB 4-1982, f. 8-24-82, ef. 9-1-82; BB 1-1984, f. & ef. 2-8-84; Renumbered from 805-072-0155; Renumbered from 441-710-0090, FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0520

Reports and Filings When Credit Union Invests in CUSO

(1) When a credit union first invests in or loans funds to a CUSO, the credit union shall, within 30 days after the funds are first invested or loaned, file with the Director a copy of:

(a) The charter, articles of association or incorporation, or partnership agreement, of the CUSO;

(b) The bylaws of the CUSO; and

(c) The most recent financial statement of the CUSO.

(2) Any amendments of the documents described by section (1) of this rule shall be filed with the Director by the credit union within 30 days after the amendment becomes effective.

(3) While a credit union has funds invested in or loaned to a CUSO, the credit union shall each year file the annual financial statement of the CUSO with the Director within 30 days after the statement is issued.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.106 & 723.602
Hist.: BB 1-1984, f. & ef. 2-8-84; Renumbered from 805-072-0156; Renumbered from 441-710-0100, FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0525

Duty to Report Changes in Accounting Systems, Methods or Procedures

(1) A credit union shall report to the Director any major change that affects bookkeeping or accounting systems, methods and procedures at least 60 days prior to implementation of the change to permit the Director to schedule examinations appropriately.

(2) Any contract or agreement by a credit union to purchase accounting services shall include a clause acknowledging the right of the Director or authorized representatives to examine any and all records of the credit union on the premises of the servicer.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.116 & 723.152
Hist.: BB 4-1982, f. 8-24-82, ef. 9-1-82; Renumbered from 805-072-0160; Renumbered from 441-710-0110, FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0530

Accrual Accounts, When Required

Each credit union with assets in excess of $5 million shall use accrual accounting.

Stat. Auth.: ORS 723.102
Stats. Implemented: ORS 723.116
Hist.: BB 4-1982, f. 8-24-82, ef. 9-1-82; Renumbered from 805-072-0165; Renumbered from 441-710-0120, FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0535

Back-Up Records; Off-Site Storage Required

(1) To insure the viability and reasonable continuity of the credit union in the event of a catastrophe that would destroy or make its records at the place of business useless, every credit union shall store off-site records that could be used to reconstruct the credit union's records. The credit union shall, at the credit union, maintain a log of the records stored off-site.

(2) The adequacy of the plan of each credit union for complying with this rule is subject to the approval of the Director. Each credit union shall submit its plan, and any major revision of its plan, to the Director for approval. The submission shall identify the kinds of records to be stored off-site, the procedure used to collect the records and to transport them to storage, and the place where stored.

Stat. Auth.: ORS 723.116
Stats. Implemented: ORS 723.116
Hist.: BB 4-1982, f. 8-24-82, ef. 9-1-82; Renumbered from 805-072-0175; Renumbered from 441-710-0140, FCS 2-2005, f. & cert. ef. 8-25-05

441-710-0540

Contents of Foreclosure Notices

The sender of a notice form required by 2008 Or Laws, ch. 19, ¦ 20 and as amended by 2009 Or Laws ch. 864, ¦ 1 (Enrolled Senate Bill 628) must enter in the form and format adopted by this rule:

(1) The statewide telephone contact number for handling consumer queries as 855-480-1950;

(2) The telephone number of the Oregon State Bar’s Lawyer Referral Service as 503-684-3763;

(3) The Oregon State Bar’s Lawyer Referral Service toll-free number as 800-452-7636;

(4) The website address of the Oregon State Bar as http://www.osbar.org;

(5) The website address for the organization providing more information and a directory of legal aid programs as http://www.oregonlawhelp.org

(6) The toll-free consumer mortgage foreclosure information number as 855-480-1950; and

(7) Information on federal loan modification programs as http://www.makinghomeaffordable.gov/.

Stat. Auth.: ORS 86.737
Stats. Implemented: ORS 86.737
Hist.: FCS 9-2008, f. 10-15-08, cert. ef. 10-16-08; FCS 6-2009(Temp), f. 8-21-09 thru 2-17-10; FCS 11-2009, f. 12-2-09, cert. ef. 12-7-09; FCS 13-2011(Temp), f. & cert. ef. 12-15-11 thru 6-12-12; Administrative correction, 6-27-12

The official copy of an Oregon Administrative Rule is contained in the Administrative Order filed at the Archives Division, 800 Summer St. NE, Salem, Oregon 97310. Any discrepancies with the published version are satisfied in favor of the Administrative Order. The Oregon Administrative Rules and the Oregon Bulletin are copyrighted by the Oregon Secretary of State. Terms and Conditions of Use

Oregon Secretary of State • 136 State Capitol • Salem, OR 97310-0722
Phone: (503) 986-1523 • Fax: (503) 986-1616 • oregon.sos@state.or.us

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