Chapter 412 — Chapter 412

ARTICLE 1. GENERAL PROVISIONS §412:1-100 Short title. This chapter shall be known and may be cited as the Code of Financial Institutions. [L 1993, c 350, pt of §1]

§412:1-101 Purpose. This chapter shall be liberally construed and applied to promote its underlying purposes and policies, which are as follows:

§412:1-102 Scope and application of chapter. (a) This chapter shall be applicable to the following: (b) A person shall not be deemed to be doing business in this State simply because it participates in a mortgage loan transaction with a Hawaii financial institution or a federal f…

§412:1-104 Names. (a) Unless authorized to engage in business as a financial institution in this State of the type indicated by the name or as otherwise approved by the commissioner, no person may use any of the terms "financial institution", "bank", "savings bank", "savings and …

§412:1-105 Deposits. Except as expressly authorized by this chapter or by federal law, no person shall solicit, accept, or hold deposits in this State. [L 1993, c 350, pt of §1; am L 2002, c 40, §11]

§412:1-106 Headings; references. The meaning or scope of any provision of this chapter is not affected by any heading. Any references in this chapter to federal laws or regulations shall be deemed to refer to successor laws and regulations unless the reference is clearly inapplic…

§412:1-107 Particular provisions prevail. Provisions of this chapter relating to a particular class of financial institutions or a particular matter shall prevail over provisions relating to financial institutions in general or to such matter in general. [L 1993, c 350, pt of §1]

§412:1-108 Jurisdiction conferred upon circuit court. For all matters requiring or permitting judicial action or remedy in this chapter, jurisdiction is conferred upon the circuit court of the judicial circuit in which the principal office in this State of the affected financial …

ARTICLE 10. CREDIT UNIONS PART I. GENERAL PROVISIONS §412:10-100 Definitions. The following definitions shall apply in construing this article unless such application would produce a result clearly inconsistent with the context of the statutory provision: "Capital" means share ac…

§412:10-101 Necessity for credit union charter. Except as expressly permitted by federal law or this chapter, no person shall engage in the business of a credit union, represent itself as a credit union, use a name or title containing the phrase "credit union" or any derivation t…

§412:10-102 Capital stock or surplus. A credit union shall have no capital stock, and shall have no minimum paid-in capital or surplus requirement. [L 1993, c 350, pt of §1]

§412:10-103 Application for charter. (a) Five or more residents of this State who share a common bond may file an application with the commissioner to engage in the business of a credit union. (b) The application shall contain the following information, unless waived by the commi…

§412:10-104 Articles and bylaws. (a) The applicants shall file with the commissioner proposed articles of association and bylaws as a part of the application for organization. (b) The articles of association shall contain, but shall not be limited to the following provisions: (c)…

§412:10-105 Disclosure of information. The identity of each original chartering applicant, and any information which is not confidential shall be available to the public. The original [chartering] applicants may request in writing that information be kept confidential. The origin…

§412:10-106 Deposit and share insurance. (a) The organizers of the proposed credit union shall apply for insurance on share and deposit accounts from the National Credit Union Administration or any successor governmental agency. (b) No credit union shall transact any credit union…

§412:10-107 Grant of approval. (a) Approval of the application for charter shall be granted if the commissioner finds that: (b) Upon approval of the application by the commissioner, the credit union shall be a body corporate and as such, subject to the limitations herein containe…

§412:10-108 Denial of charter. If the commissioner is not satisfied that the applicant meets all the criteria set forth for approval, the commissioner shall issue a written decision denying the applicant's application for charter. An applicant who is denied approval may request a…

§412:10-109 Membership. (a) The membership of a credit union shall consist of those persons who share a common bond set forth in the articles of association, have been duly admitted members, have paid any required one-time or periodic membership fee, or both, have subscribed to o…

§412:10-110 Membership meetings. (a) A credit union shall hold annual and special meetings of members when and as required by its bylaws. The bylaws shall provide that members be given reasonable notice of a meeting. A quorum for conducting any business at any meeting shall be fi…

§412:10-111 Voting. (a) Persons eligible to vote at a credit union meeting shall be: (b) Each member shall have only one vote, regardless of the number or type of shares of the credit union such member owns. A credit union member other than a natural person may vote through an ag…

§412:10-112 Board of directors. (a) The governing body of a credit union shall be its board of directors. The board shall consist of an odd number of directors, at least five in number, to be elected annually by and from the members as the bylaws provide. All members of the board…

§412:10-113 No compensation of directors or committee members. No member of the board, no officer of the board other than the treasurer, and no member of any committee, other than an employee, shall be compensated for services; provided that reasonable life, health, accident, sim…

§412:10-114 Credit committee. (a) If the bylaws provide for a credit committee, the board of directors may appoint or the members may elect a credit committee. The credit committee shall consist of an odd number of members of the credit union, not less than three, but which shall…

§412:10-115 Credit manager. If the bylaws provide, the board of directors may appoint a credit manager in addition to or in lieu of a credit committee, subject to the direct supervision of the president of the credit union. The president may also be the credit manager. The credit…

§412:10-116 Loan officers. (a) The board of directors, and if given such power by the board, the credit committee or the credit manager, may appoint one or more loan officers, who may be empowered to approve or disapprove loan applications, subject to written policies established…

§412:10-117 Supervisory committee. (a) Within thirty days following each annual election, the board of directors shall appoint a supervisory committee consisting of no fewer than three and not more than five members, one of whom may be a director other than the treasurer. The byl…

§412:10-118 Record of officials. Within thirty days after election or appointment, a record of the names and addresses of the members of the board and such other committees and officers, as required by the commissioner, shall be filed with the division of financial institutions. …

§412:10-119 Conflicts of interest. No director, committee member, officer, agent or employee of the credit union shall in any manner, directly or indirectly, participate in the deliberation upon or the determination of any question affecting that person's pecuniary interest or th…

§412:10-120 Suspension or removal of officials. (a) The supervisory committee by a two-thirds vote of the entire committee may suspend any member of the credit committee or the credit manager and shall report such action to the board of directors. The board shall meet not less th…

§412:10-121 Central credit unions. (a) Central credit unions may be chartered under this article and shall enjoy all powers of other credit unions chartered under this article and be subject to all provisions of this article not inconsistent with this section. (b) A central credi…

§412:10-122 Taxation. (a) All credit unions, now or hereafter chartered under this chapter shall have the same immunity from state and local taxation that federally chartered credit unions have from time to time under the laws of the United States government. Any credit union org…

§412:10-123 Fiscal year. The fiscal year of every credit union organized under this article shall end at the close of business on December 31. [L 1993, c 350, pt of §1]

§412:10-124 Conducting business outside this State. A credit union organized under this article may conduct business outside of this State in other states or territories where it is permitted to conduct business as a credit union. [L 1993, c 350, pt of §1]

§412:10-125 REPEALED. L 2016, c 149, §16.

PART II. POWERS OF CREDIT UNIONS §412:10-200 General powers. (a) Except as expressly prohibited or limited by this chapter, a credit union shall have the power to issue shares, solicit, accept and hold deposits, and engage in any activities which are usual or incidental to the bu…

§412:10-201 Powers granted under federal law. (a) In this section "federal power" means any activity, right, privilege, or immunity granted to a federal credit union under any federal statute, rule, regulation, interpretation or court decision. (b) Any credit union desiring to ac…

§412:10-202 Credit union service organizations. A credit union may invest its funds in shares, stocks, or obligations of credit union service organizations providing services which are associated with the routine operations of credit unions, up to one per cent of the capital of t…

§412:10-203 Sale or purchase of obligations or notes. A credit union may purchase, sell, pledge, or discount or otherwise receive or dispose of, in whole or in part, any eligible obligations of its members and to purchase from any liquidating credit union notes made by individual…

§412:10-204 Sale or purchase of assets. A credit union may sell all or part of its assets to another credit union, purchase all or part of the assets of another credit union and assume the liabilities of the selling credit union and those of its members. [L 1993, c 350, pt of §1]

PART III. ACCOUNTS §412:10-300 Applicability of other provisions of this chapter. Except to the extent that the provisions of this part are inconsistent, all provisions of article 4 shall apply to the share accounts and deposit accounts offered by a credit union. In case of any i…

§412:10-301 Share accounts and membership shares. (a) Share accounts and membership shares (if any) shall be subscribed to and paid for in such manner as the bylaws prescribe. (b) A credit union may require its members to subscribe to and make payments on membership shares. (c) T…

§412:10-302 Dividends. (a) At such intervals as the board of directors may authorize, and after provision for required reserves, the board of directors may declare dividends to be paid on share accounts and membership shares (if any) from undivided earnings. (b) Dividends may be …

§412:10-303 Deposit accounts. (a) A credit union may accept deposit accounts from its members, other credit unions and governmental units subject to the terms, rates and conditions established by the board of directors. (b) Interest may be paid on deposit accounts at various rate…

§412:10-304 Withdrawals. (a) Funds in share and deposit accounts may be withdrawn for payment to the account holder or third parties in such manner and in accordance with such procedures as are established by the board of directors. (b) Share and deposit accounts shall be subject…

§412:10-305 Minor accounts. Payments on share and deposit accounts may be received from a minor who may withdraw funds from such accounts including the dividends and interest thereon. Payments on share and deposit accounts by a minor and withdrawals thereof by the minor shall be …

§412:10-306 Joint accounts. A member may designate any person or persons to own a share or deposit account with the member in joint tenancy with the right of survivorship, as a tenant in common or under any other form of joint ownership permitted by law, but no co-owner, unless a…

§412:10-307 Trust accounts. (a) Share and deposit accounts may be owned by a member in trust for a beneficiary. (b) Beneficiaries may be minors, but no beneficiary unless a member in that person's own right, shall be permitted to vote, obtain loans, hold office or be required to …

§412:10-308 Payable-on-death accounts. Notwithstanding any other provision of law, a credit union may establish share and deposit accounts payable to one or more persons during their lifetimes and on the death of all of them to one or more payable-on-death payees. Any transfer to…

§412:10-309 Liens. The credit union shall have a lien on the share accounts and accumulated dividends of a member for any sum owed the credit union by said member and for any loan endorsed by the member. The credit union shall also have a right of immediate setoff with respect to…

§412:10-310 Dormant accounts. (a) If there has been no activity on a share or deposit account for one year, the credit union may impose a reasonable maintenance fee. (b) Share and deposit accounts, dividends, interest and other sums due or standing in the name of a member or othe…