Title XXV, Business and Financial Institutions

The board of directors shall have the general direction of the business affairs, funds, and records of the credit union.

It shall be the duty of the board of directors to: (1) Act upon applications for membership or to appoint one (1) or more membership officers to approve applications for membership under such conditions as the board prescribes. A record of the actions taken by a membership office…

The board of directors may appoint an executive committee, consisting of not less than three (3) directors, which may be authorized to act for the board in all respects, subject to any conditions or limitations prescribed by the board.

Each month either the board of directors or the executive committee shall meet. These bodies shall meet on other occasions as often as is necessary.

(1) A credit committee shall have the general supervision of all loans to members, unless it is dispensed with as provided in KRS 286.6-265. (2) The credit committee shall meet as often as the business of the credit union requires to consider applications for loans and review the…

The credit committee may be dispensed with in the bylaws, and a credit manager, under the general supervision of the president, may be empowered to approve or disapprove loans subject to the policies and conditions prescribed by the board of directors. The president may serve as …

(1) The credit committee may appoint one (1) or more loan officers and delegate the power to approve or disapprove loans, subject to such limitations or conditions as the credit committee prescribes. (2) Where a credit manager is provided in lieu of a credit committee, the credit…

(1) Unless the credit union has been audited by a licensed public accountant or other qualified person or firm, the supervisory committee shall make or cause to be made a comprehensive annual audit of the books and affairs of the credit union. It shall submit a report of each ann…

Injunction. (1) The supervisory committee by a unanimous vote may suspend any member of the credit committee and shall report such action to the board of directors for appropriate action. (2) The supervisory committee by a unanimous vote may suspend any officer or member of the b…

The supervisory committee by a majority vote may call a special meeting of the members to consider any violation of this subtitle, the credit union's charter or bylaws, or any practice of the credit union deemed by the supervisory committee to be unsafe or unauthorized.

(1) The capital of a credit union consists of the aggregate amount of the share and deposit accounts of its members plus all reserves and undivided earnings. (2) Shares may be subscribed to, paid for and transferred in such manner as the bylaws prescribe.

(1) As used in this section, "credit card guaranty" means an agreement pursuant to which a natural person assumes liability for indebtedness to a credit union incurred by use of a credit card without receiving the contractual right to obtain extensions of credit under the account…

(1) At such intervals and for such periods as the board of directors may authorize, and after provision for the required reserves, the board of directors may declare dividends to be paid on shares and share certificates from net earnings. Prior approval of the commissioner shall …

A credit union may offer deposits and deposit certificates to its members and other credit unions, subject to such terms, rates, and conditions as the board of directors establishes and any regulations the commissioner may prescribe.

Christmas clubs and vacation clubs may be operated under conditions established by the board of directors, and other special purpose share and deposit accounts may be operated with authorization from the commissioner.

(1) Shares, share certificates, deposits, and deposit certificates may be withdrawn for payment to the account holder or to third parties, in such manner and in accordance with such procedures as may be established by the board of directors, subject to approval by the commissione…

Shares, share certificates, and deposit certificates may be issued to and deposits received from a person under eighteen (18) years of age who may withdraw the shares and deposits, including the dividends and interest thereon. Deposits and share payments made by a person under ei…

(1) A member may designate any person or persons to own shares, share certificates, deposits and deposit certificates with him 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, unle…

(1) Shares, share certificates, deposits, and deposit certificates may be held in the name of a member in trust for a beneficiary, or in the name of a nonmember in trust for a beneficiary who is a member. (2) Beneficiaries may be under eighteen (18) years of age; but no beneficia…

The credit union shall have a lien on the shares, share certificates, deposits, deposit certificates and accumulated dividends or interest of a member in his individual, joint or trust account, for any sum past due the credit union from said member or for any loan endorsed by him…

(1) Not later than December 31, 1984, a credit union shall apply for insurance on shares and deposits as provided by the national credit union administration under Title II of the Federal Credit Union Act (12 U.S.C. secs. 1781 et seq.), or alternatively, a form of comparable insu…

(1) Whenever the losses of any credit union, resulting from a depreciation 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 shareholders, the credit un…

A credit union may loan to members for such purposes and upon such conditions as the bylaws may provide.

The interest rates on loans shall be determined by the board of directors, not to exceed two percent (2%) per month on unpaid balances.

A credit union may assess charges to members, in accordance with the bylaws, for failure to meet their obligations to the credit union in a timely manner.

(1) At any regularly called meeting, the members, by a two-thirds (2/3) vote of those present, may expel any member for cause and after hearing. A member may withdraw from a credit union by filing a written notice of such intention. (2) All amounts paid in on shares of an expelle…

Every application for a loan shall be made in writing upon a form, which the credit committee, credit manager, or loan officer prescribes. The application shall state the purpose for which the loan is desired, and the security, if any, offered. Each loan shall be evidenced by a w…

No loan shall be made to any member in an aggregate amount in excess of ten percent (10%) of the credit union's capital.

Security within the meaning of this subtitle may include, without limitation because of enumeration, the endorsement of a note by a surety, comaker or guarantor; assignment of an interest in real or personal property; or assignment of shares or wages. The adequacy of any security…

A member may receive a loan in installments, or in one (1) sum, and may pay the whole or any part of his loan on any day on which the office of the credit union is open for business.

Upon written application by a member, the credit committee or credit manager may approve a self-replenishing line of credit, and loan advances may be granted to the member within the limit of such line of credit. Where a line of credit has been approved, no additional loan applic…

Loans secured by first mortgages on real estate shall not exceed fifty percent (50%) of the credit union's unimpaired capital, unless the commissioner shall otherwise determine by regulation or by order in any special case.

(1) A credit union may participate in any guaranteed loan program of the federal or state government under the terms and conditions specified in the law under which such a program is provided. (2) A credit union may purchase the conditional sales contracts, notes and similar inst…

(1) A credit union may make loans to its officers, directors, employees, loan officers, credit manager, and to members of its supervisory and credit committees, provided that: (a) The loan complies with all lawful requirements under this subtitle with respect to loans to other bo…

(1) A credit union may purchase or make available insurance for its members in amounts related to their respective ages, shares, deposits or loan balances or to any combination of them. (2) A credit union may enter into cooperative marketing arrangements to facilitate its members…

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, employee, or agent of another corporation, par…

A credit union may enter into cooperative marketing arrangements to facilitate its members' voluntary purchase of such goods and services as are in the interest of improving economic and social conditions of the members.

A credit union may collect, receive and disburse moneys in connection with the providing of negotiable checks, money orders, travelers' checks, and other money-type instruments, and for such other purposes as may provide benefit or convenience to its members, and charge a reasona…

(1) A credit union may act as trustee or custodian of: (a) Individual retirement accounts authorized by federal or state law; (b) Pension funds of self-employed individuals or of a company or organization sponsoring the credit union; or (c) Other similar retirement or pension pla…

Funds not used in loans to members may be invested: (1) In securities, obligations, or other instruments of or issued by or fully guaranteed as to principal and interest by the United States of America or any agency thereof or in any trust or trusts established for investing dire…

A credit union shall, at the close of each accounting period, establish and maintain reserves at least equal to the reserve requirements of the National Credit Union Administration necessary to maintain deposit insurance.

The regular reserve shall belong to the credit union and shall be used to meet losses resulting from loans and risk assets and to meet such other losses as are approved by the commissioner and shall not be distributed except on liquidation of the credit union, or in accordance wi…

The commissioner shall define by regulation what is deemed "risk assets" for the purpose of establishing the regular reserve.

In addition to such regular reserve, special reserves to protect the interest of members shall be established when required by regulation, or when found by the board of directors of the credit union or by the commissioner, in any special case, to be necessary for that purpose.

Any credit union organized under KRS 286.6-015 or any other provision of this subtitle and all shares and deposits therein shall be exempt from all taxation imposed by this state or any taxing authority within this state. No law which taxes corporations in any form, or the shares…

No expenses of a credit union operating in Kentucky shall be paid out of appropriations from the general fund.

(1) If it appears that any credit union is bankrupt or insolvent, or that it has willfully violated this subtitle, or is operating in an unsafe or unsound manner, the commissioner may issue an order temporarily suspending the credit union's operations for not less than thirty (30…

(1) A credit union may elect to dissolve voluntarily and liquidate its affairs in the manner prescribed in this section. (2) The board of directors shall adopt a resolution recommending the credit union be dissolved voluntarily, and directing that the question of liquidation be s…

(1) Any credit union may, with the approval of the commissioner, merge with another credit union under the existing charter of the other credit union, pursuant to any plan agreed upon by the majority of each board of directors of each credit union joining in the merger, approved …

(1) A credit union incorporated under the laws of this state may be converted to a credit union organized under the laws of any other state or under the laws of the United States, subject to regulations issued by the commissioner. (2) A credit union organized under the laws of th…