Chapter 412 — Chapter 412

PART IV. LOANS §412:10-400 Applicability of part. This part sets forth the requirements and restrictions for lending by all credit unions. A credit union may make loans and extensions of credit as permitted by this part and as provided elsewhere in this article. [L 1993, c 350, p…

§412:10-401 General requirements for loans. A credit union shall make loans and extensions of credit that are consistent with prudent lending practices and in compliance with all applicable federal and state law. [L 1993, c 350, pt of §1]

§412:10-402 Loans to members. A credit union may make unsecured and secured loans to its members for such purposes and upon such conditions as the bylaws may provide. The board of directors shall establish written policies with respect to the granting of loans and the extending o…

§412:10-403 Interest rates. (a) The interest rates on loans shall be determined by the board of directors, subject to the following: (b) The board may also authorize any refund of interest on such classes of loans and under such conditions as it prescribes. (c) If a greater rate …

§412:10-404 Other charges. (a) In addition to interest charged on loans, a credit union may charge members all reasonable expenses in connection with the making, closing, disbursing, extending, collecting or renewing of loans. (b) A credit union may assess charges to members, in …

§412:10-405 Applications. Except as provided in section 412:10-410, every application for a loan shall be made in writing upon a form prescribed by the credit union. Each loan shall be evidenced by a written document. [L 1993, c 350, pt of §1]

§412:10-406 Prepayment of loan. A member may repay a loan, prior to maturity in whole or in part on any business day without penalty. [L 1993, c 350, pt of §1]

§412:10-407 Limitations on obligations of one borrower. (a) No credit union shall permit a person to become indebted or liable to it, either directly or indirectly, on loans or extensions of credit in a total amount outstanding at any one time in excess of ten per cent of the cre…

§412:10-408 Loans to officials. Loans may be made to officers, directors and members of the credit and supervisory committees of the credit union, provided that:

§412:10-409 Real estate mortgage loans. (a) The amount of any credit union loan secured by a mortgage on real property shall be limited to the following percentages of the appraised value of the property: The principal amount of the loan shall be added together with the outstandi…

§412:10-410 Lines of credit. A credit union may offer its members self-replenishing lines of credit. Loan advances within the limits of a line of credit may be made without the necessity of submitting additional loan applications; provided that the applicant qualifies for the lin…

§412:10-411 Loans to other credit unions. A credit union may make loans to other credit unions, central credit unions, corporate credit unions or a central liquidity facility established under federal or state law; provided that the loans shall be approved by the board of directo…

§412:10-412 Participation loans. Participation loans to credit union members jointly with other credit unions, credit union service organizations, or financial organizations shall be in accordance with written policies of the board of directors. A credit union which originates a …

§412:10-413 Other loan programs. (a) A credit union may loan to members under any government guaranteed or insured loan program and such insurance on these loans shall be deemed adequate security. The terms of such loans shall be as defined by the board of directors under the pro…

PART V. INVESTMENTS §412:10-500 Applicability of part. This part sets forth the requirements and restrictions for investments made by all credit unions. A credit union may invest its assets as may be permitted by this part and as may be provided elsewhere in this article. [L 1993…

§412:10-501 General requirement for investments. (a) A credit union shall make investments that are consistent with prudent investment practices and in compliance with all applicable federal and state law. (b) The board of directors of a credit union and any other person charged …

§412:10-502 Permitted investments. (a) To the extent specified herein, a credit union may invest its own assets in: (b) A credit union may invest its own assets in bonds, securities, or similar obligations issued by this State or any county of this State, through an appropriate a…

§412:10-503 Deposits made by credit unions. A credit union may deposit any of its funds in a deposit or share account with another depository institution; provided that the other depository institution has been designated a depository by the board of directors of the credit union…

PART VI. RESERVE ALLOCATIONS §412:10-600 Regular reserve. (a) At the end of each accounting period and before the payment of any dividend, each credit union shall set aside from its gross earnings the following reserve against contingencies: (b) Whenever a credit union's regular …

§412:10-601 Special reserves. The board of directors may establish, or [the] commissioner may require any credit union on an individual basis to establish, and transfer funds into one or more special reserve accounts when in the board's or the commissioner's judgment such action …

§412:10-602 Risk assets. The commissioner shall define by rule what is deemed "risk assets" for the purpose of establishing the regular reserve. [L 1993, c 350, pt of §1]

PART VII. OTHER MEMBER SERVICES §412:10-700 Insurance for members. A credit union may purchase or make available insurance for its members either on an individual or group basis. [L 1993, c 350, pt of §1]

§412:10-701 Liability insurance for officers. A credit union may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the credit union, or who is or was serving at the request of the credit union as a director, officer, …

§412:10-702 Group purchasing. A credit union may enter into marketing arrangements and joint ventures with other credit unions, or organizations or financial institutions to facilitate its members' voluntary purchase of goods, insurance and other services from third parties, cons…

§412:10-703 Money-type instruments. A credit union may collect, receive and disburse monies in connection with the providing of negotiable checks, money orders, travelers checks, and other money-type instruments, and the providing of services through automated teller machines and…

§412:10-704 Retirement accounts. A credit union may act as trustee or custodian of any form of retirement, pension, profit-sharing, or deferred income accounts authorized under federal law or the laws of this State including but not limited to individual retirement accounts, pens…

PART VIII. CORPORATE CREDIT UNION §412:10-800 Application of part. Provisions of this part shall govern the formation and operations of a corporate credit union. Only one corporate credit union may be chartered under this article and as such shall have the exclusive right to use …

§412:10-801 Purposes. The purposes of the corporate credit union are to:

§412:10-802 Membership. Membership in the corporate credit union shall consist of and be limited to the credit union subscribers to the articles of association, credit unions chartered under this article, the Federal Credit Union Act or any other credit union law, and organizatio…

§412:10-803 Organization. The application, approval and formation process for the corporate credit union shall be the same as for any other credit union, except that ten or more credit unions shall be required to file an application for a charter. [L 1993, c 350, pt of §1]

§412:10-804 Management and operation of corporate credit union. The corporate credit union shall be organized and operated like any other credit union, except that:

§412:10-805 Powers. The corporate credit union shall have all the rights, powers and privileges of any other credit union chartered under this article, as well as the power to:

§412:10-806 Participation in central system. The corporate credit union may enter into agreements and subscribe to any required shares for the purpose of participation in the National Credit Union Administration Central Liquidity Facility created by Public Law 95-630 or any other…

§412:10-807 Collection on loans to members. (a) For any amounts due from a member to the corporate credit union, the corporate credit union shall have: (b) The board of directors or credit committee of the corporate credit union may require and accept additional security for loan…

§412:10-808 Meetings. The board of directors of the corporate credit union shall meet at least every ninety days in person or by means of telephone as provided in the bylaws. [L 1993, c 350, pt of §1]

ARTICLE 11. FINANCIAL INSTITUTION HOLDING COMPANIES §412:11-100 Applicability of article. The provisions of this article shall govern the registration, reporting and examination of financial institution holding companies in this State. [L 1993, c 350, pt of §1]

§412:11-102 Examination of financial institution holding company. The commissioner may from time to time conduct reasonable examinations of any financial institution holding company that directly owns twenty-five per cent or more of any class of voting securities of a Hawaii fina…

§412:11-103 Use of state or federal examinations. The commissioner may accept, adopt, or use in lieu of an examination prescribed by section 412:11-102 or otherwise, all or any part of the results of an examination conducted by an appropriate state or federal regulatory agency of…

§412:11-105 Sanctions for failure to register or submit reports. Any financial institution holding company failing to register or furnish any report or information as and when required under this article, shall be subject to an administrative fine of not more than $200 for each d…

§412:12-101 Definitions. As used in this article, unless a different meaning is required by the context, the following words and phrases shall have the following meanings: "Acquisition of a branch" means the acquisition of a branch located in a host state, without engaging in an …

§412:12-102 Authority of Hawaii state banks to establish interstate branches by merger. (a) With the prior approval of the commissioner, a Hawaii state bank may establish and operate one or more branches in a state other than Hawaii, pursuant to an interstate merger transaction i…

§412:12-104 Authority of out-of-state banks to establish interstate branches in Hawaii by merger. (a) One or more Hawaii banks may enter into an interstate merger transaction with one or more out-of-state banks under this article, and an out-of-state bank resulting from the trans…

§412:12-105 Authority of out-of-state banks to establish a de novo interstate branch or acquire an interstate branch. (a) An out-of-state bank that does not operate a branch in this State and that meets the requirements of this article may establish and operate a branch in this S…

§412:12-108 Examinations; periodic reports; cooperative agreements; assessment of fees. (a) To the extent consistent with subsection (c), the commissioner may examine any branch established and maintained in this State pursuant to this article by an out-of-state state bank as the…

§412:13-202 Application to establish and maintain a branch or agency; contents. A foreign bank, in order to procure a license under this article to establish and maintain a Hawaii state branch or Hawaii state agency, shall submit an application to the commissioner, together with …

§412:13-203 Application to establish and maintain a branch or agency; manner of filing and determination. (a) A foreign bank making an application under this article for a license to establish and maintain a Hawaii state branch or Hawaii state agency shall deliver to the commissi…

§412:13-216 Representative office; application. (a) The application for a license to establish and maintain a Hawaii representative office shall be in writing under oath and shall be in a form and contain any information as the commissioner may require by rule or order. The appli…

§412:13-217 Representative office; factors for approval of application. (a) The commissioner shall issue a license to a foreign bank to establish and maintain a Hawaii representative office if the commissioner finds that: (b) In considering whether the management of the foreign b…

§412:13-222 Relocation of office; written application necessary. (a) No foreign bank that is licensed to establish and maintain a Hawaii state branch, Hawaii state agency, or Hawaii representative office shall relocate any Hawaii office without the commissioner's prior written ap…

§412:13-224 Supervision and enforcement. (a) The commissioner shall have all of the powers granted to the commissioner by the laws of this State to the extent appropriate to enable the commissioner to supervise each Hawaii state branch, Hawaii state agency, or Hawaii representati…