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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
credit unions; certificates; powers; committee
Purpose
Prescribes response times for the Deputy Director of the Financial Institutions Division within the Department of Insurance and Financial Institutions (Deputy Director) when receiving a completed request for a proposed credit union bylaws amendment, name change or change in principal place of business or branch within Arizona. Requires a state-chartered credit union to submit a request to the Deputy Director to exercise rights, powers and privileges of an out-of-state credit union.
Background
The Department of Insurance and Financial Institutions (DIFI) has statutory authority over state-chartered banks and state-chartered credit unions. A credit union is a cooperative nonprofit association that is incorporated for the purposes of encouraging thrift among its members, creating a source of credit and other financial services at a fair and reasonable cost and assisting members to manage and control their financial resources to improve their social and economic conditions. A credit union's incorporators must prepare, adopt and execute a certificate of organization and bylaws as outlined and may not transact any business in the credit union's name until the certificate has been issued by the Arizona Corporation Commission and the application and bylaws have been approved by the Deputy Director (A.R.S. §§ 6-501 and 6-506).
A credit union board of directors (board) has the authority and responsibility for directing the business affairs, monies and records of the credit union. A board 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 must submit the proposed amendments to the Deputy Director for approval (A.R.S. §§ 6-508 and 6-531).
The name of every credit union must include the words credit union and may not be either identical to the name of any other credit union doing business in Arizona or so similar as to be misleading or cause confusion. A credit union may only change its name on the written authorization of the Deputy Director. A credit union may change its principal place of business or branch within Arizona with the prior approval of the Deputy Director and payment of the statutorily prescribed fee (A.R.S. §§ 6-509 and 6-510).
A credit union credit committee has the general supervision of all loans to members, unless it is replaced by a credit manager. The credit committee may approve or disapprove loans subject to written policies established by the board of directors. A credit union president may appoint one or more loan officers and to delegate the power to approve or disapprove loans, subject to limitations or conditions prescribed by the credit committee or board of directors. A member whose application is disapproved by a loan officer may appeal the action to the credit committee or credit manager as appropriate under the bylaws (A.R.S. §§ 6-540 and 6-538).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires the Deputy Director upon receiving a completed request for a proposed credit union bylaws amendment or name change to:
a) submit an acknowledgment of receipt or request additional information within 10 business days after receiving the request; and
b) make a decision on the request within 30 business days after the date the acknowledgment of receipt is submitted to the credit union.
2. Requires the Deputy Director upon receiving a completed request for a change in a credit union's principal place of business or branch within Arizona to:
a) submit an acknowledgment of receipt or request additional information within 10 business days after receiving the request; and
b) make a decision on the request within 60 business days after the date the acknowledgment of receipt is submitted to the credit union.
3. Allows, for good cause shown, the Deputy Director to extend the statutorily prescribed response time regarding a proposed amendment request or a request for a change in the credit union's principal place of business or branch that is located in Arizona.
4. Removes the prohibition on a credit union delegating the authority to exercise any of the credit union's general powers to any person who is not an officer, director or employee of the credit union without the prior written approval of the Deputy Director.
5. Allows a state-chartered credit union whose accounts are insured by an insuring organization to exercise all of the rights, powers and privileges of any out-of-state credit union with the prior approval of the Deputy Director.
6. Requires a state-chartered credit union, before exercising any right, power or privilege of any out-of-state credit union, to submit a request to the Deputy Director on a Deputy Director prescribed form and reference the specific statutory or regulatory source of the rights, powers or privileges that the credit union wishes to exercise.
7. Removes the prohibition on a loan being made only if approved by a majority of the members of the credit committee who are present at the meeting at which the loan application is considered.
8. Requires an appeal to the credit committee regarding a member whose loan application is disapproved by a loan officer to be approved or denied by a majority of the members of the credit committee who are present at the meeting at which the application is considered.
9. Specifies that the par value of shares is only required to be included in the bylaws during the credit union's organization procedures if any exist.
10. Specifies that, in regard to credit union membership shares, the par value of membership shares may differ from the par value of other shares, if any par value exists.
11. Makes technical and conforming changes.
12. Becomes effective on the general effective date.
House Action
COM 2/17/26 DPA 11-0-0-0
3rd Read 2/26/26 52-0-8
Prepared by Senate Research
March 12, 2026
MG/SJ/hk