Title 26 — BANKS AND BANKING

26-2101. Scope. This chapter shall be known as the "Idaho Credit Union Act" and shall be applicable to all persons except federal credit unions, operating as credit unions in the state of Idaho and to such other persons as shall subject themselves to its provisions, and to such p…

26-2102. Purpose. The purpose of this chapter is to allow groups of persons with a common bond as provided in this chapter to form private nonprofit cooperative corporations to be known as credit unions, to provide an opportunity for its members to use and control their own money…

26-2103. Supplementary general principles of law applicable. Unless displaced by the particular provisions of this chapter, the Uniform Commercial Code, the Uniform Consumer Credit Code, the Idaho Securities Act, the corporation laws of this state and the principles of law and eq…

26-2104. Definition and use of terms. As used in this chapter, unless the context otherwise requires: (1) "Credit union" means a cooperative nonprofit corporation chartered under the provisions of this chapter. (2) "Director" means the director of the department of finance of the…

26-2105. Organization. (1) Any seven (7) or more residents of the jurisdiction of the state of Idaho, of legal age, who have a common bond referred to in section 26-2110, Idaho Code, may organize a credit union and become charter members thereof by: (a) Filing an application furn…

26-2106. AMENDMENT TO ARTICLES OF INCORPORATION AND BYLAWS — APPROVAL OF DIRECTOR — PROCEDURE. (1) A credit union’s articles of incorporation may be amended as provided in the articles of incorporation with approval of the director. Amendments to the articles of incorporation mus…

26-2107. Restrictions. Any person, corporation, copartnership or association, except a credit union organized under the provisions of this chapter, an interstate credit union with a permit issued under section 26-2152, Idaho Code, the federal credit union act, 48 Statute 1216 (19…

26-2108. POWERS. A credit union shall have power to: (1) Make contracts; (2) Sue and be sued in the name of the credit union; (3) Own, hold, or use any real or personal property or any interest therein that is necessary or incidental to the credit union’s operations, subject to t…

26-2109. POWER TO ACQUIRE AND HOLD REAL PROPERTY. (1) A credit union may invest in fixed assets necessary or related to its operations, subject to the following limitations: (a) The credit union’s net worth equals at least seven percent (7%) of total assets; (b) The board approve…

26-2110. Membership. (1) The membership of a credit union shall be limited to and consist of the subscribers to the articles of incorporation and such other persons having the common bond set forth in the articles of incorporation as have been duly admitted members, have paid the…

26-2111. EXPULSION AND WITHDRAWAL FROM FIELD OR MEMBERSHIP. A member may be expelled in accordance with the bylaws and any policies established by the board. The credit union shall notify a member of the expulsion, the reasons for the expulsion, and the process by which the membe…

26-2113. MEMBER VOTING. (1) No member may have more than one (1) vote. A natural person may not hold more than one (1) membership in a credit union on behalf of himself or herself. An organization having membership in a credit union may cast one (1) vote through a natural person …

26-2113A. ANNUAL MEMBERSHIP MEETINGS. (1) A credit union’s annual membership meeting shall be held at such time and in such manner as the board prescribes, as permitted in the bylaws, and shall be conducted according to the rules of procedure approved by the board. If the meeting…

26-2113B. SPECIAL MEMBERSHIP MEETINGS. (1) A special membership meeting of a credit union may be called by: (a) A majority vote of the board; (b) A majority vote of the supervisory committee to suspend a director for cause; or (c) A written petition signed or similarly authentica…

26-2114. BOARD OF DIRECTORS — ELECTION OF DIRECTORS — TERMS — VACANCIES — MEETINGS — RULES. (1) The business and affairs of a credit union shall be managed by a board of no fewer than five (5) and no more than fifteen (15) directors. (2) The directors must be elected by and from …

26-2114A. board members — QUALIFICATIONS. (1) A member of the board of directors must be a natural person and a member of the credit union. If a member of the board of directors ceases to be a member of the credit union, that person’s service as a member of the board of directors…

26-2114B. Officials — FIDUCIARY DUTY — reliance on INFORMATION. (1) Officials owe a fiduciary duty to the credit union and must discharge the duties of their respective positions: (a) In good faith; (b) With the care an ordinarily prudent person in a like position would exercise …

26-2115. OFFICERS. (1) Within ten (10) days following the organizational meeting and after each annual membership meeting, the board shall elect from among its members a chair of the board, one (1) or more than one (1) vice-chair and a secretary. The board shall also elect other …

26-2116. BOARD OF DIRECTORS — POWERS AND DUTIES. (1) The business and affairs of a credit union shall be managed by the board of directors of the credit union. The duties of the board include, but are not limited to, the duties enumerated in this section. The duties listed in sub…

26-2117. Penalties for official misconduct. Any officer, director, or committee member or loan officer of a credit union who knowingly permits a loan to be made or participates in a loan to a nonmember is guilty of a misdemeanor and shall be primarily liable to the credit union f…

26-2118. CREDIT COMMITTEE — APPOINTMENT — DUTIES. (1) The board may appoint a credit committee. The credit committee shall have the general supervision of all loans to members. It shall be the duty of the credit committee to review all applications for loans, to ascertain whether…

26-2119. loans. (1) A credit union may make secured and unsecured loans to its members under policies established by the board. A person that is not a member of the credit union may serve as a co-borrower or guarantor on a loan to a member of the credit union. Each loan must be e…

26-2120. LIMIT ON LOAN AMOUNT — LOANS TO ONE BORROWER. (1) Unless otherwise provided in this chapter or by a rule pursuant to this chapter, no loan may be made to any borrower if the loan would cause the borrower and any associated borrowers to be indebted to the credit union on …

26-2120A. LIMIT ON LOAN MATURITY. The maturity of a loan to a member may not exceed fifteen (15) years except as follows: (1) A credit union may make loans with maturities not to exceed twenty (20) years in the case of: (a) A loan to finance the purchase of a manufactured home if…

26-2121. SUPERVISORY COMMITTEE — MEMBERSHIP — TERMS — VACANCIES. (1) A supervisory committee of at least three (3) members must be appointed by the board as provided in the bylaws. Members of the supervisory committee shall serve a term of one (1) to three (3) years, unless soone…

26-2121A. SUPERVISORY COMMITTEE DUTIES. (1) The supervisory committee of a credit union shall: (a) Meet at least quarterly; (b) Keep fully informed as to the financial condition of the credit union and the decisions of the credit union’s board; (c) Perform or arrange for an annua…

26-2121B. SUSPENSION OF MEMBERS OF THE BOARD BY SUPERVISORY COMMITTEE — FOR CAUSE. (1) The supervisory committee may, for cause, suspend a member of the board, until a special membership meeting called for that purpose is held in accordance with the requirements of section 26-211…

26-2121C. SUSPENSION OF MEMBERS OF the BOARD OR SUPERVISORY COMMITTEE BY BOARD — FOR CAUSE. (1) The board may, for cause, suspend a member of the board or a member of the supervisory committee until a special membership meeting, called for that purpose, is held. The membership me…

26-2121D. REMOVAL OF DIRECTOR OR SUPERVISORY COMMITTEE MEMBER. (1) The members of a credit union may remove a director of the credit union at a special membership meeting held in accordance with section 26-2113B, Idaho Code, and called for that purpose. If the members remove a di…

26-2122. Compensation — Credit union manager, employment. No officer, director, or committee member may be compensated, directly or indirectly, for his services as such; provided, however, an elected member of the board of directors may serve as a part-time treasurer and receive …

26-2123. Shares and certificates of deposit. A share may be in increments of five dollars ($5.00) with a minimum of five dollars ($5.00) and a maximum of twenty-five dollars ($25.00) as the board of directors shall establish. The shares of a credit union shall all be common share…

26-2124. Joint accounts. A member may designate any person or persons to hold shares, deposits, and thrift club accounts with him in joint tenancy with the right of survivorship; but no joint tenant, unless a member in his own right, shall be permitted to vote, obtain loans, or h…

26-2125. Minors. Shares, deposits or thrift club accounts may be issued in the name of a minor and such above accounts may be withdrawn by such minor and payments made on such withdrawals shall be valid.

26-2126. trust accounts. Share may be issued in the name of a member in trust for a beneficiary, including a minor, but no beneficiary, unless a member in his own right, may be permitted to vote, obtain loans, hold office or be required to pay an entrance fee. Payment of part or …

26-2127. INVESTMENT OF FUNDS. (1) A credit union’s board of directors must establish a written investment policy consistent with this chapter and other applicable laws and regulations. (2) A credit union may invest its funds in any of the following, as long as the investments are…

26-2128. Liquidity requirements. (a) Every credit union shall have on hand as a liquidity reserve an amount equal to four percent (4%) of its outstanding shares, certificates of deposit, and certificates of indebtedness. Share or deposit accounts from which a member may withdraw …

26-2129. Reserve requirements. (a) At the end of each accounting period the gross income shall be determined. From this amount there shall be set aside, as a regular reserve against losses on loans and against such other losses as may be specified in rules prescribed under this c…

26-2130. DIVIDENDS. (1) After allocation to required reserves, the board of directors may, at the end of any dividend period duly established, declare a dividend to be paid on shares or share certificates from undivided earnings as the bylaws may provide. Dividends may be paid at…

26-2131. Share reduction. Whenever the losses of any credit union, resulting from a depreciating in value of its loans or investments or otherwise, exceed its undivided earnings and reserve fund so that the estimated value of its assets is less than the total amount due the share…

26-2132. Merger. Any credit union may, with the approval of the director, merge with another credit union under the existing charter of such other credit union. The director shall not approve a merger if the effect of the merger would be to provide a broader common bond than allo…

26-2133. REPORTS — FINANCIAL AND STATISTICAL DATA. Each credit union shall timely file with the director any financial and statistical report or other information that a federally insured state-chartered credit union is required to file with the national credit union administrati…

26-2134. Application fees. For the purpose of paying the costs incident to the ascertainment of whether articles of incorporation should be issued, the subscribers to any such articles of incorporation shall pay, at the time of filing their articles of incorporation with the dire…

26-2135. Books and records. The books and records of a credit union shall be kept in accordance with generally accepted accounting principles and by procedures approved by the director. Every credit union shall keep correct and complete books of accounts, minutes of meetings of m…

26-2136. fees. (1) On or before February 15 of each calendar year, the director shall fix and collect from each credit union an assessment fee based upon the total assets of the credit union as of December 31 of the previous calendar year, which fees shall not exceed the amounts …

26-2136A. EXAMINATIONS AND INVESTIGATIONS REPORTS — ACCESS TO RECORDS — OATHS — SUBPOENAS. (1) The director shall examine each credit union at least once every eighteen (18) months, unless the director determines with respect to a credit union that a less frequent examination sch…

26-2136B. EXAMINATION REPORTS AND SPECIFIED OTHER INFORMATION CONFIDENTIAL — EXCEPTIONS — PENALTY. (1) The following shall be confidential and privileged and not subject to public disclosure under chapter 1, title 74, Idaho Code, and shall be subject to the provisions of section …

26-2136C. dISCLOSURE OF CONFIDENTIAL INFORMATION by the Department — penalty. (1) The department of finance, its director, employees, and former employees shall not disclose to any person or agency any fact or information obtained in the course of business of the department under…

26-2137. False reports. Any person, firm, corporation, or association which maliciously and knowingly spreads false reports about the management or finances of any credit union shall be guilty of a misdemeanor.

26-2138. Taxation. A credit union shall be deemed an institution for savings and, together with all the accumulations therein, shall not be subject to taxation except as to real estate owned. The shares of a credit union shall not be subject to a stock transfer tax when issued by…

26-2139. Conversion. A state chartered credit union may be converted into a federal credit union by complying with the following requirements: (a) The proposition for such conversion shall first be approved and a date set for a vote thereof by the members, either at a meeting to …