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REFERENCE TITLE: credit unions; certificates; powers; committee |
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State of Arizona House of Representatives Fifty-seventh Legislature Second Regular Session 2026
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HB 2979 |
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Introduced by Representative Wilmeth
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AN ACT
amending sections 6-506, 6-508, 6-509, 6-510, 6-516, 6-517, 6-538 and 6-551, arizona revised statutes; RELATING to credit unions.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 6-506, Arizona Revised Statutes, is amended to read:
6-506. Organization procedure
A. Any seven or more residents of this state who are of legal age and who have a common bond of interest or association may apply to the deputy director for permission to organize a credit union under this chapter.
B. The incorporators shall prepare, adopt and execute a certificate of organization and shall agree to comply with the requirements of the certificate and with all of the laws and rules applicable to credit unions. The certificate shall state:
1. The credit union's name and the location of the proposed principal place of business.
2. That the existence of the credit union is perpetual.
3. The names and addresses of the incorporators and the number of shares subscribed to by each.
4. The purpose for which the credit union is formed.
C. The incorporators shall prepare, adopt and execute bylaws consistent with this chapter for the general governance of the credit union. The bylaws, among other things, shall provide:
1. The proposed field of membership that shall consist of one or more groups having a common bond of interest, occupation or association or to groups within a well-defined neighborhood, community or rural district consistent with the purposes of the credit union.
2. The par value, if any, of shares.
3. The number of directors of the credit union, which shall not be fewer than five, all of whom shall be members, together with the titles of the officers and the number of members of the supervisory committee, which shall not be fewer than three.
4. The conditions under which shares may be issued, transferred or withdrawn, loans may be made and repaid and monies may be otherwise invested.
5. The number of members of the credit committee, which shall not be fewer than three, or the authorization of a credit manager.
D. The incorporators shall select at least five persons who are eligible for membership and who agree to become members and serve on the board of directors, and at least three persons who are eligible for membership and who agree to become members and serve on the supervisory committee. The persons selected to serve on the board of directors and the supervisory committee shall execute an agreement to serve in those capacities until the first annual meeting or until the election of their respective successors, whichever is later.
E. The incorporators shall forward to the deputy director such application as is required by the deputy director, along with the application fee provided for in section 6-126, the certificate of organization, the bylaws and the agreements to serve and any additional information that the deputy director may request.
F. The incorporators shall not transact any business in the name of the credit union until the certificate of incorporation has been issued by the corporation commission and the application and the bylaws have been approved by the deputy director.
Sec. 2. Section 6-508, Arizona Revised Statutes, is amended to read:
6-508. Certificate of organization and bylaws
A. The deputy director shall prepare standard forms of the certificate of organization and bylaws, that are consistent with this chapter, which and that may be used by credit union incorporators.
B. The board of directors may adopt proposed amendments to the certificate of organization at a duly held meeting. The board of directors shall submit the proposed amendments to the members for ratification at a regular or special meeting, after which they shall be submitted to the deputy director for the deputy director's approval or disapproval. If approved by the deputy director, the board of directors shall follow the procedure for organization prescribed in section 6-507, subsection B.
C. The board of directors may adopt proposed amendments to the bylaws at any duly held meeting by a three-fourths majority vote. After proposed amendments have been approved, the board shall submit the proposed amendments to the deputy director for the deputy director's approval. Within ten business days after receiving a completed proposed amendment request, the deputy director shall submit an acknowledgment of receipt or request additional information. The deputy director shall make a decision within thirty business days after the date that the acknowledgment of receipt is submitted to the credit union. For good cause shown, the deputy director may extend the response time. The amendments are effective on approval of the deputy director. At the next regular or special meeting of the membership, the board shall submit all amendments to the bylaws to the members for ratification.
Sec. 3. Section 6-509, Arizona Revised Statutes, is amended to read:
6-509. Exclusive use of name; exception
A. The name of every credit union organized under this chapter shall include the words "credit union". A credit union shall not adopt a name either identical to the name of any other credit union doing business in this state or so similar as to be misleading or cause confusion.
B. It is unlawful for any person to engage in this state in the business of a credit union or to make use of the words "credit union" or any other words in a manner reasonably calculated to convey the impression that the person is engaged in the business of a credit union in this state, unless the act is done by or on behalf of a person having authority under this chapter, except an association of credit unions, or an organization, corporation or association whose membership or ownership consists primarily of credit unions or credit union organizations, may use a name or title containing the words "credit union".
C. A credit union may change its name only on the written authorization of the deputy director. Within ten business days after receiving a completed request for a credit union name change, the deputy director shall submit an acknowledgment of RECEIPT or request additional information. The deputy director shall make a decision within thirty business days after the date that the acknowledgment of RECEIPT is submitted to the credit union.
Sec. 4. Section 6-510, Arizona Revised Statutes, is amended to read:
6-510. Principal place of business; branch office
A. A credit union may change its principal place of business or branch within this state with the prior approval of the deputy director and the payment of the fee provided in section 6-126.
B. A credit union may establish a branch office with the prior approval of the deputy director.
C. A credit union organized under this chapter may conduct business in other states or territories of the United States where it is allowed to do so on approval of the deputy director, if it is reasonably necessary to service its members.
D. Within ten business days after receiving a completed request for a change in the credit union's PRINCIPAL place of business or branch that is located in this state, the deputy director shall submit an acknowledgment of RECEIPT or request additional information. the deputy director shall make a decision within sixty business days after the date that the acknowledgment of receipt is submitted to the credit union. For good cause shown, the deputy director may extend the response time.
Sec. 5. Section 6-516, Arizona Revised Statutes, is amended to read:
6-516. General powers
A. In addition to the powers prescribed elsewhere in this chapter and except as prohibited by law, a credit union may:
1. Enter into contracts of any nature.
2. Sue or be sued.
3. Adopt, use and display a corporate seal.
4. Acquire, lease, hold, assign, pledge, hypothecate, sell, discount or otherwise dispose of property or assets, either in whole or in part, necessary or incidental to its operations.
5. Borrow money from any source, except that a credit union shall obtain the prior written approval of the deputy director to borrow in excess of an aggregate of fifty percent of its capital.
6. Purchase all or a portion of the assets and assume all or a portion of the liabilities of a credit union chartered under the laws of any state, a federal credit union, a bank or an out-of-state bank.
7. Offer financial services incidental to the purposes of a credit union, including electronic fund transfers, safe deposit boxes and leasing and correspondent arrangements with other financial institutions.
8. Hold membership in other credit unions organized under this chapter or other laws or in other associations and organizations.
9. Engage in activities and programs offered by any governmental unit that are incidental or reasonably related to credit union activities.
10. Act as a fiscal agent for and receive payments on share and deposit accounts from a governmental unit.
11. Make contributions to any nonprofit civic, charitable or service organizations.
B. A credit union may exercise all incidental powers that are convenient, suitable or necessary to enable it to promote or carry out its purposes.
C. A credit union shall not delegate the management of a credit union or the exercise of any power set forth in this section to any person who is not an officer, director or employee of the credit union without the prior written approval of the deputy director. The deputy director may examine the books, records and business affairs of any person or entity to whom the credit union proposes to delegate any such authority.
Sec. 6. Section 6-517, Arizona Revised Statutes, is amended to read:
6-517. Federal parity
In addition to all other rights, powers and privileges, a credit union that is organized under the laws of this state and whose accounts are insured by an insuring organization:
1. Has all of the rights, powers and privileges and is entitled to the same exemptions and immunities as any credit union that is chartered under the laws of the United States.
2. May exercise all of the rights, powers and privileges of any out-of-state credit union. Before exercising any such right, power or privilege, the credit union shall submit a request to the deputy director on a form prescribed by the deputy director and reference the specific statutory or regulatory source of the rights, powers or privileges that the credit union wishes to exercise.
Sec. 7. Section 6-538, Arizona Revised Statutes, is amended to read:
6-538. Credit committee
A. The credit committee has the general supervision of all loans to members, unless it is replaced by a credit manager as provided in section 6-539. The credit committee may approve or disapprove loans subject to written policies established by the board of directors.
B. The credit committee shall meet as often as the business of the credit union requires but not less frequently than monthly, to review the lending activities of the credit union and to consider applications for loans. A loan shall not be made unless it is Appeals to the credit committee as provided in section 6-540 shall be approved or denied by a majority of the members of the committee who are present at the meeting at which the application is considered.
C. The credit committee or the credit manager shall keep a record of all actions taken and shall report on such actions to the board at its next meeting.
Sec. 8. Section 6-551, Arizona Revised Statutes, is amended to read:
6-551. Share accounts
A. Share accounts shall be subscribed to and paid for in such manner as the board of directors prescribes. A credit union may require its members to subscribe to and make payments on membership shares. Membership shares may not be pledged as security on any loan.
B. The par value, if any, of any membership shares may differ from the par value of other shares.
C. A credit union may limit the amount in share accounts and deposit accounts and any such limit must apply to all account holders.