CHAPTER 52. CREDIT UNIONS
Table of Sections
|52.02||BYLAWS AND AMENDMENTS, APPROVAL.|
|52.03||"CREDIT UNION," UNLAWFUL USE.|
|52.06||SUPERVISION; REPORTS; AUDITS; FEES.|
|52.061||Repealed, 2001 c 161 s 58
|52.062||CREDIT UNIONS; SUSPENSION OF OPERATION.|
|52.063||PROCEEDINGS FOLLOWING SUSPENSION, CONTINUATION OF SUSPENSION, OR CONSENT CEASE AND DESIST ORDER; APPOINTMENT OF NATIONAL CREDIT UNION ADMINISTRATION BOARD AS RECEIVER.|
|52.07||FISCAL YEAR; MEETINGS; VOTING.|
|52.09||DIRECTORS; POWERS AND DUTIES.|
|52.10||CREDIT COMMITTEE; CREDIT MANAGER; POWERS.|
|52.11||SUPERVISORY COMMITTEE; DUTIES.|
|52.12||CAPITAL; ENTRANCE FEES; CREDIT UNION TO HAVE LIEN.|
|52.13||DEPOSITS IN NAME OF MINOR.|
|52.135||Repealed, 1982 c 473 s 30
|52.136||Repealed, 1982 c 473 s 30
|52.137||INDIVIDUAL RETIREMENT ACCOUNTS.|
|52.14||INTEREST ON LOANS.|
|52.16||MAY LOAN MONEY, CONDITIONS.|
|52.165||GRADUATED PAYMENT HOME LOAN.|
|52.19||EXPULSION OR WITHDRAWAL OF MEMBERS.|
|52.201||REORGANIZING FEDERAL CREDIT UNION INTO STATE CREDIT UNION.|
|52.202||DIRECTORS MAY EXECUTE CERTIFICATES.|
|52.21||CHANGE OF PLACE OF BUSINESS.|
|52.211||STUDENT EDUCATION PROGRAMS.|
|52.212||SENIOR CITIZEN LOCATIONS.|
|52.22||Repealed, 1989 c 27 art 2 s 10
|52.24||MANDATORY SHARE AND DEPOSIT INSURANCE.|
Subdivision 1. Application.
For purposes of this chapter, the terms defined in this section
have the meanings given.
Subd. 2. Board.
"Board" means the board of directors of a credit union.
Subd. 3. Commissioner.
"Commissioner" means the commissioner of the Department
Subd. 4. Credit union.
"Credit union" means a cooperative, not-for-profit financial
institution formed and operating under this chapter.
Subd. 5. Community.
"Community" means an identifiable local neighborhood, community,
rural district, or other geographically well-defined area in which individuals have common
interests or interact. "Well-defined" means the proposed area has specific geographic boundaries,
including a school district, city, township, county, or clearly identifiable neighborhood, but does
not include the state as a whole.
Subd. 6. Director.
"Director" means a member of the board.
Subd. 7. Federal credit union.
"Federal credit union" means a credit union organized and
operating under the laws of the United States.
Subd. 8. Insolvent.
"Insolvent" means the condition that results when the cash value of assets
realizable in a reasonable period of time is less than the liabilities that must be met within that time.
Subd. 9. Member.
"Member" means a person whose application for membership has been
approved as meeting the membership criteria of the credit union, who has paid any required
entrance or membership fee, and who has paid for one or more shares.
Subd. 10. Organization.
"Organization" means any corporation, association, partnership,
limited liability company, cooperative, trust, or other legal entity.
Subd. 11. Out-of-state credit union.
"Out-of-state credit union" means a credit union
organized under the laws of another state or United States territory or possession.
Subd. 12. Small group.
"Small group" means a group that has less than 500 potential
members that has made a written request to a credit union for credit union services.
Subd. 13. Unsafe or unsound practice.
"Unsafe or unsound practice" means any action
or lack of action that is contrary to generally accepted standards of prudent operation and that
poses an abnormal risk of loss to the credit union or its members.
History: 2002 c 339 s 1
Any seven residents of the state may apply to the commissioner of commerce for permission
to organize a credit union.
A credit union is a cooperative society, incorporated for the twofold purpose of promoting
thrift among its members and creating a source of credit for them at legitimate rates of interest for
A credit union is organized in the following manner:
(1) The applicants execute, in duplicate, a certificate of organization by the terms of which
they agree to be bound, which shall state:
(a) the name and location of the proposed credit union;
(b) the names and addresses of the subscribers to the certificate and the number of shares
subscribed by each;
(2) The applicants submit the following in the form prescribed by the commissioner of
(a) a statement of the common bond of the proposed credit union;
(b) the number of potential members;
(c) the geographic dispersion of the potential members;
(d) evidence of interest, including willingness of potential members to assume responsibility
for leadership and service;
(e) a two-year forecast of probable levels of assets, shares and deposits, and income and
(f) the availability of other credit union services to the potential members;
(g) other information the commissioner requires;
(3) They next prepare and adopt bylaws for the general governance of the credit union
consistent with the provisions of this chapter, and execute them in duplicate;
(4) The certificate and the bylaws, both executed in duplicate, are forwarded to the
commissioner of commerce with a $1,000 application fee, which may be waived by the
commissioner for a credit union to be located in a low- or moderate-income area as defined in
Code of Federal Regulations, title 12, part 25(1), (n)(1) and (n)(2), and where no other depository
institution operates an office;
(5) The commissioner of commerce shall, within 60 days of the receipt of the certificate,
the information required by paragraph (2), and the bylaws determine whether they comply with
the provisions of this chapter, and whether or not the organization of the credit union in question
would benefit its members, be economically feasible, and be consistent with the purposes of
(6) Thereupon the commissioner of commerce shall notify the applicants of the decision. If it
is favorable, the commissioner shall upon receipt of a commitment for insurance of accounts as
required by section
52.24, subdivision 2
, issue a certificate of approval, attached to the duplicate
certificate of organization, and return them with the duplicate bylaws to the applicants. If it is
unfavorable, the applicants may, within 60 days after the decision, appeal for a review in a court
of competent jurisdiction;
(7) The applicants shall thereupon file the duplicate of the certificate of organization, with
the certificate of approval attached thereto, with the secretary of state, who shall make a record of
the certificate and return it, with a certificate of record attached thereto, to the commissioner of
commerce for permanent records; and
(8) Thereupon the applicants shall be a credit union incorporated in accordance with the
provisions of this chapter.
In order to simplify the organization of credit unions, the commissioner of commerce shall
prepare approved forms of certificate of organization and bylaws, consistent with this chapter,
which may be used by credit union incorporators for their guidance, and on written application
of seven residents of the state, shall supply them without charge with a blank certificate of
organization and a copy of the form of suggested bylaws.
History: (7774-1) 1925 c 206 s 1; 1949 c 88 s 1; 1951 c 308 s 1; 1971 c 154 s 1; 1975 c 303
s 1; 1976 c 181 s 2; 1981 c 220 s 14; 1983 c 230 s 1; 1983 c 289 s 114 subd 1; 1984 c 512 s 1;
1984 c 655 art 1 s 92; 1986 c 444; 1987 c 349 art 1 s 27; 1999 c 151 s 25
52.02 BYLAWS AND AMENDMENTS, APPROVAL.
Subdivision 1. Amendments by members.
(a) To amend the certificate of organization or
bylaws, proposed amendments shall be set forth as follows:
(1) if balloting by mail has not been authorized by the board of directors, then a statement
of intent to amend which identifies the proposed amendments shall be set forth in the notice of
the meeting; or
(2) if balloting by mail has been authorized by the board of directors as either the exclusive
means of voting or in conjunction with voting in person, a statement of intent to amend which
identifies the proposed amendments shall be set forth in a notice mailed to all members eligible to
vote at least 30 days prior to the close of balloting by mail. Any amendments to the certificate of
organization or bylaws shall be approved by two-thirds vote of the members actually voting, if the
members actually voting constitute a quorum.
(b) A member receiving notice of a proposed bylaw amendment pursuant to this subdivision
may request a written copy of the proposed bylaw amendment. This request must be made no
later than ten days prior to the close of balloting by mail or the date set for the meeting. The
credit union shall provide the member with a written copy of the proposed bylaw amendment
upon receipt of a timely request and the original notice must inform the member of the right to
make a request. A copy of the proposed amendments shall be posted in the credit union's office
for member review 30 days prior to the close of balloting by mail or the date of the meeting.
Subd. 2. Bylaw amendments by directors.
The members may, pursuant to subdivision 1,
provide for the bylaws to be amended by the board of directors. If the bylaws permit amendment
by the directors, any amendments shall be approved by a two-thirds vote of the total number of
directors authorized. The board of directors shall not adopt, amend, or repeal a bylaw fixing
a quorum for meetings of members, prescribing procedures for removing directors or filling
vacancies in the board, or fixing the number of directors or their classifications, qualifications,
or terms of office, but may adopt or amend a bylaw to increase the number of directors. If three
percent or more of all members propose a resolution for action by the members to adopt, amend,
or repeal bylaws adopted, amended, or repealed by the board and the resolution sets forth the
provisions proposed for adoption, amendment, or repeal, the resolution shall be submitted to the
members for a vote as provided in subdivision 1.
Subd. 3. Approval.
Amendments to the certificate of organization or bylaws, other
than the addition to the field of membership of a small group or a group determined by the
commissioner under section
to be too small to form its own credit union, must be approved
by the commissioner of commerce before they become operative. The commissioner shall not
unreasonably withhold approval if the amendments do not violate any provision of this chapter
or other state law. In any event, the commissioner shall approve or disapprove the proposed
amendment within 60 days of the date the proposed amendment is submitted to the commissioner
by the credit union. In case of disapproval the credit union shall have the right to appeal to a court
of competent jurisdiction within the time limits stated in section
, clause (6). In case any
amendment to the certificate of organization is adopted, the resolution, containing a full text of
the amendment and verified by its president or treasurer and approved by the commissioner of
commerce, shall be recorded in the Office of the Secretary of State. Upon addition to the field of
membership of a small group or a group determined by the commissioner under section
be too small to form its own credit union, a credit union must provide timely written notice to
the commissioner, and the commissioner shall have 30 days from receipt of the notice to reject
the addition of that group; if the commissioner does not reject the addition within that period, it
is deemed approved.
History: (7774-2) 1925 c 206 s 2; 1933 c 346 s 1; 1949 c 88 s 2; 1961 c 331 s 1; 1971 c 154
s 2; 1976 c 176 s 1; 1976 c 181 s 2; 1982 c 429 s 1; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s
92; 1Sp1985 c 13 s 185; 1987 c 349 art 1 s 28; 1989 c 127 s 1; 2002 c 339 s 2
52.03 "CREDIT UNION," UNLAWFUL USE.
Subdivision 1. Penalty.
Except as provided in subdivision 2, it shall be a misdemeanor
for any person, association, copartnership, or corporation, except corporations organized in
accordance with the provisions of this chapter, to use the words "credit union" in their name or
Subd. 2. Reciprocity.
With the approval of the commissioner, a credit union chartered
in another state shall be permitted to do business in Minnesota if Minnesota credit unions are
permitted to do business in that state, and if:
(a) the credit union is organized under laws similar to Minnesota laws applicable to credit
(b) the credit union is financially solvent;
(c) the credit union needs to conduct business in this state to adequately serve its members in
(d) the credit union satisfies the mandatory share and deposit insurance requirements in
(e) the credit union designates and maintains an agent for the service of process in this
(f) the credit union complies with the provisions of section
Subd. 3. Cease and desist.
If subsequent to approval it is determined that a reciprocating
state credit union is not in compliance with the criteria of subdivision 2, the commissioner may
by order require such reciprocating state credit union to discontinue its Minnesota operations
by a date certain. The order would be subject to the procedures applicable to cease and desist
proceedings pursuant to sections
and any rules promulgated thereunder.
History: (7774-3) 1925 c 206 s 3; 1984 c 500 s 1; 1984 c 655 art 2 s 7 subd 1
Subdivision 1. Generally.
A credit union has the following powers:
(1) to offer its members and other credit unions various classes of shares, share certificates,
deposits, or deposit certificates;
(2) to receive the savings of its members either as payment on shares or as deposits,
including the right to conduct Christmas clubs, vacation clubs, and other thrift organizations
within its membership. Trust funds received by a real estate broker or the broker's salespersons
in trust may be deposited in a credit union;
(3) to make loans to members for provident or productive purposes as provided in section
(4) to make loans to a cooperative society or other organization having membership in
the credit union;
(5) to deposit in state and national banks and trust companies authorized to receive deposits;
(6) to invest in any investment legal for savings banks or for trust funds in the state and,
notwithstanding clause (3), to invest in and make loans of unsecured days funds (federal funds or
similar unsecured loans) to financial institutions insured by an agency of the federal government
and a member of the Federal Reserve System or required to maintain reserves at the Federal
(7) to borrow money as hereinafter indicated;
(8) to adopt and use a common seal and alter the same at pleasure;
(9) to make payments on shares of and deposit with any other credit union chartered by this
or any other state or operating under the provisions of the Federal Credit Union Act, in amounts
not exceeding in the aggregate 25 percent of its unimpaired assets. However, payments on shares
of and deposit with credit unions chartered by other states are restricted to credit unions insured
by the National Credit Union Administration. The restrictions imposed by this clause do not
apply to share accounts and deposit accounts of the Minnesota corporate credit union in United
States central credit union or to share accounts and deposit accounts of credit unions in the
Minnesota corporate credit union;
(10) to contract with any licensed insurance company or society to insure the lives of
members to the extent of their share accounts, in whole or in part, and to pay all or a portion of
the premium therefor;
(11) to indemnify each director, officer, or committee member, or former director, officer,
or committee member against all expenses, including attorney's fees but excluding amounts
paid pursuant to a judgment or settlement agreement, reasonably incurred in connection with or
arising out of any action, suit, or proceeding to which that person is a party by reason of being
or having been a director, officer, or committee member of the credit union, except with respect
to matters as to which that person is finally adjudged in the action, suit, or proceeding to be
liable for negligence or misconduct in the performance of duties. The indemnification is not
exclusive of any other rights to which that person may be entitled under any bylaw, agreement,
vote of members, or otherwise;
(12) upon written authorization from a member, retained at the credit union, to make
payments to third parties by withdrawals from the member's share or deposit accounts or through
proceeds of loans made to such member, or by permitting the credit union to make those payments
from the member's funds prior to deposit; to permit draft withdrawals from member accounts, but a
credit union proposing to permit draft withdrawals shall notify the commissioner of commerce, in
the form prescribed, of its intent not less than 90 days prior to authorizing draft withdrawals. The
board of directors of a credit union may restrict one class of shares to the extent that it may not be
redeemed, withdrawn, or transferred except upon termination of membership in the credit union;
(13) to inform its members as to the availability of various group purchasing plans which
are related to the promotion of thrift or the borrowing of money for provident and productive
purposes by means of informational materials placed in the credit union's office, through its
publications, or by direct mailings to members by the credit union;
(14) to facilitate its members' voluntary purchase of types of insurance incidental to
promotion of thrift or the borrowing of money for provident and productive purposes including,
but not limited to the following types of group or individual insurance: Fire, theft, automobile, life
and temporary disability; to be the policy holder of a group insurance plan or a subgroup under a
master policy plan and to disseminate information to its members concerning the insurance
provided thereunder; to remit premiums to an insurer or the holder of a master policy on behalf
of a credit union member, if the credit union obtains written authorization from the member for
remittance by share or deposit withdrawals or through proceeds of loans made by the members, or
by permitting the credit union to make the payments from the member's funds prior to deposit;
and to accept from the insurer reimbursement for expenses incurred or in the case of credit life,
accident and health, and involuntary unemployment insurance within the meaning of chapter 62B
commissions for the handling of the insurance. The amount reimbursed or the commissions
received may constitute the general income of the credit union. The directors, officers, committee
members and employees of a credit union shall not profit on any insurance sale facilitated
through the credit unions;
(15) to contract with another credit union to furnish services which either could otherwise
perform. Contracted services under this clause are subject to regulation and examination by the
commissioner of commerce like other services;
(16) in furtherance of the twofold purpose of promoting thrift among its members and
creating a source of credit for them at legitimate rates of interest for provident purposes, and not
in limitation of the specific powers hereinbefore conferred, to have all the powers enumerated,
authorized, and permitted by this chapter, and such other rights, privileges and powers incidental
to, or necessary for, the accomplishment of the objectives and purposes of the credit union;
(17) to rent safe deposit boxes to its members if the credit union obtains adequate insurance
or bonding coverage for losses which might result from the rental of safe deposit boxes;
(18) notwithstanding the provisions of section
, to accept deposits of public funds in an
amount secured by insurance or other means pursuant to chapter 118A or section
applicable law and to receive deposits of trust funds provided that either the provider or the
beneficial owner of the funds is a member of the credit union accepting the deposit;
(19) to accept and maintain treasury tax and loan accounts of the United States and to pledge
collateral to secure the treasury tax or loan accounts, in accordance with the regulations of the
Department of Treasury of the United States;
(20) to accept deposits pursuant to section
149A.97, subdivision 5
, notwithstanding the
provisions of section
, if the deposits represent funding of prepaid funeral plans of members;
(21) to sell, in whole or in part, real estate secured loans provided that:
(a) the loan is secured by a first lien;
(b) the board of directors approves the sale;
(c) if the sale is partial, the agreement to sell a partial interest shall, at a minimum:
(i) identify the loan or loans covered by the agreement;
(ii) provide for the collection, processing, remittance of payments of principal and interest,
taxes and insurance premiums and other charges or escrows, if any;
(iii) define the responsibilities of each party in the event the loan becomes subject to
collection, loss or foreclosure;
(iv) provide that in the event of loss, each owner shall share in the loss in proportion to its
interest in the loan or loans;
(v) provide for the distribution of payments of principal to each owner proportionate to its
interest in the loan or loans;
(vi) provide for loan status reports;
(vii) state the terms and conditions under which the agreement may be terminated or
(d) the sale is without recourse or repurchase unless the agreement:
(i) requires repurchase of a loan because of any breach of warranty or misrepresentation;
(ii) allows the seller to repurchase at its discretion; or
(iii) allows substitution of one loan for another;
(22) in addition to the sale of loans secured by a first lien on real estate, to sell, pledge,
discount, or otherwise dispose of, in whole or in part, to any source, a loan or group of loans, other
than a self-replenishing line of credit; provided, that within a calendar year beginning January 1
the total dollar value of loans sold, other than loans secured by real estate or insured by a state or
federal agency, shall not exceed 25 percent of the dollar amount of all loans and participating
interests in loans held by the credit union at the beginning of the calendar year, unless otherwise
authorized in writing by the commissioner;
(23) to designate the par value of the shares of the credit union by board resolution;
(24) to exercise by resolution the powers set forth in United States Code, title 12, section
1757. Before exercising each power, the board must submit a plan to the commissioner of
commerce detailing implementation of the power to be used;
(25) to offer self-directed individual retirement accounts and Keogh accounts and act as
custodian and trustee of these accounts if:
(1) all contributions of funds are initially made to a deposit, share or share certificate account
in the credit union;
(2) any subsequent transfer of funds to other assets is solely at the direction of the member
and the credit union exercises no investment discretion and provides no investment advice with
respect to plan assets; and
(3) the member is clearly notified of the fact that National Credit Union Share Insurance
Fund coverage is limited to funds held in deposit, share or share certificate accounts of National
Credit Union Share Insurance Fund-insured credit unions;
(26) to impose reasonable charges for the services it provides to its members;
(27) to impose financing charges and reasonable late charges in the event of default on loans,
and recover reasonable costs and expenses, including, but not limited to, actual collection costs
and attorneys' fees incurred both before and after judgment, incurred in the collection of sums
due, if provided for in the note or agreement signed by the borrower; and
(28) to acquire, lease, hold, assign, pledge, sell, or otherwise dispose of interests in a loan
or groups of loans other than a self-replenishing line of credit.
Subd. 2.[Repealed, 1985 c 137 s 3
Subd. 2a. Credit sales or service contracts.
A person may enter into a credit sale or service
contract for sale to a state or federal credit union doing business in this state, and a credit union
may purchase and enforce the contract under the terms and conditions set forth in section
subdivisions 4 to 14
Subd. 3. Parity.
Notwithstanding any other provision of law, and in addition to all powers
and activities, express, implied, or incidental, that a credit union has under the laws of this state, a
credit union may exercise the powers and activities of, or take any action permitted for, a federal
credit union, upon approval of the commissioner. The commissioner must approve or deny a
request under this subdivision within 60 days after submission of the request by a credit union.
The commissioner may not authorize state credit unions subject to this chapter to engage in credit
union activity prohibited by the laws of this state.
History: (7774-4) 1925 c 206 s 4; 1937 c 213 s 1; 1943 c 247 s 1; 1949 c 88 s 3; 1961 c
331 s 2; 1963 c 384 s 1; 1967 c 301 s 1; 1971 c 154 s 3; 1973 c 740 s 1; 1975 c 394 s 1; 1976
c 308 s 1; 1977 c 71 s 1; 1977 c 84 s 1; 1977 c 315 s 1; 1978 c 747 s 3; 1979 c 50 s 7; 1979 c
149 s 1; 1981 c 99 s 1; 1981 c 316 s 1; 1983 c 43 s 1; 1983 c 289 s 114 subd 1; 1984 c 512 s 2;
1984 c 655 art 1 s 92; 1985 c 137 s 1; 1986 c 353 s 3; 1986 c 444; 1987 c 105 s 2; 1991 c 42 s 2;
1993 c 257 s 30,31; 1993 c 343 s 3; 1995 c 202 art 3 s 10; 1997 c 157 s 36,37; 1997 c 215 s 2;
2000 c 427 s 8; 2001 c 7 s 90; 2002 c 339 s 3,4
Subdivision 1. Requirements.
Credit union membership consists of the incorporators and
other persons as may be elected to membership and subscribe to at least one share as designated
by the board of directors, pay the initial installment thereon and the entrance fee if any. In addition
to a regularly qualified member, the spouse of a member, the blood or adoptive relatives of either
of them and their spouses may be members. When an individual member of a credit union leaves
the field of membership, the member, and all persons who became members by virtue of that
individual's membership may continue as members. The surviving spouse of a regularly qualified
member, and the blood or adoptive relatives of either of them and their spouses may become
members. Organizations, incorporated or otherwise, composed for the most part of the same
general group as the credit union membership may be members. Credit unions chartered by this or
any other state, or any federal credit union may be members. Credit union organizations shall be
limited to persons within one or more groups or any combination of groups having a common
bond of occupation, association, or community.
Subd. 2. Application.
Any two persons representing a group of 30 or less or any 15 persons
representing a larger group may apply to the commissioner, advising the commissioner of the
common bond of the group and its number of potential members, for a determination whether
it is feasible for the group to form a credit union. Upon a determination that it is not feasible to
organize because the number of potential members is too small, the applicants will be certified by
the commissioner as eligible to petition for membership in an existing credit union capable of
serving the group. If the credit union so petitioned resolves to accept the group into membership,
it shall follow the bylaw amendment and approval procedure set forth in section
The commissioner may adopt rules to implement this subdivision. If adopted, these rules
must provide that:
(1) for the purpose of this subdivision, groups with a potential membership of less than 500
will be considered too small to be feasible as a separate credit union;
(2) for the purpose of this subdivision, groups with a potential membership of at least 500
but less than 3,000 may be considered to be too small to be feasible as a separate credit union,
based upon criteria developed by the commissioner, taking into account the objectives of this
(3) groups with a potential membership of 3,000 or more will be considered in light of all
circumstances relevant to the objectives of this subdivision; and
(4) all group applications, except for applications from groups made up of members of
existing credit unions or groups made up of people who have a common employer which
qualifies them for membership in an existing credit union, will be considered separately from
any consideration of the membership provisions of existing credit unions; except that, groups
made up of members of an existing credit union may be certified under this subdivision with
the agreement of the credit union.
History: (7774-5) 1925 c 206 s 5; 1945 c 540 s 1; 1949 c 88 s 4; 1953 c 40 s 1; 1955 c 453 s
1; 1961 c 331 s 3; 1971 c 154 s 4; 1973 c 740 s 2; 1979 c 106 s 1; 1983 c 230 s 2; 1984 c 512 s 3;
1986 c 444; 1987 c 181 s 1; 1995 c 202 art 4 s 22; 1999 c 151 s 26; 2002 c 339 s 5,6
52.06 SUPERVISION; REPORTS; AUDITS; FEES.
Subdivision 1. Report and audit schedule.
Credit unions shall be under the supervision
of the commissioner of commerce. Each credit union shall annually, on or before January 25,
file a report with the commissioner of commerce on forms supplied by the commissioner for
that purpose giving such relevant information as the commissioner may require concerning the
operations during the preceding calendar year. Additional reports may be required. Credit unions
shall be examined, at least once every 24 calendar months, by the commissioner of commerce.
Further, in lieu of this examination the commissioner may accept any examination made by the
National Credit Union Administration, provided a copy of the examination is furnished to the
commissioner. A report of the examination by the commissioner of commerce shall be forwarded
to the president, or the chair of the board if the position is so designated pursuant to section
, of the examined credit union within 60 days after completion of the examination.
Within 60 days of the receipt of such report, a general meeting of the directors and committees
shall be called to consider matters contained in the report. For failure to file reports when due,
unless excused for cause, the credit union shall pay to the commissioner of finance $5 for each
day of its delinquency.
Subd. 2. Bookkeeping standards.
Whenever it shall appear to the commissioner of
commerce that any credit union operating in this state does not keep books and accounts in
such manner as to enable the commissioner to readily ascertain the true condition of such credit
union, the commissioner may require the officers of such credit union or any of them to open and
keep such books or accounts as the commissioner may determine and prescribe for the purpose
of keeping accurate and convenient records of the transactions and accounts of such credit
union. Credit union books and records must be maintained in one location and be available for
examination sometime between the hours of 8:00 a.m. and 5:00 p.m. weekdays. Any credit union
failing to produce the books and records when requested shall be charged for such attempted
examination by the examiner on the basis outlined in section
and a like charge shall be
assessed for each and every attempt made by the examiner to obtain the books and records. Prepaid
expenses may be treated as an asset account in accordance with sound accounting procedures.
History: (7774-6) 1925 c 206 s 6; 1945 c 540 s 2; 1949 c 88 s 5; 1961 c 331 s 4; 1963 c
396 s 1; 1967 c 51 s 1; 1971 c 154 s 5; 1973 c 740 s 3,4; 1981 c 73 s 1; 1983 c 289 s 114 subd
1; 1984 c 576 s 17; 1984 c 655 art 1 s 92; 1985 c 248 s 70; 1986 c 444; 1992 c 587 art 1 s 18;
2003 c 51 s 9; 2003 c 112 art 2 s 50
52.062 CREDIT UNIONS; SUSPENSION OF OPERATION.
Subdivision 1. Reasons for commissioner's action.
Whenever the commissioner of
commerce shall find that a credit union is engaged in unsafe or unsound practices in conducting its
business or that the shares of the members are impaired or are in immediate danger of becoming
impaired, or that such credit union has knowingly or negligently permitted any of its officers,
directors, committee members, or employees to violate any material provision of any law, bylaw,
or rule to which the credit union is subject, the commissioner of commerce may proceed in the
manner provided by subdivision 2, 3, or 4.
Subd. 2. Suspension.
The commissioner of commerce may suspend the operation of the
credit union by giving notice to its board of directors by certified mail. Said notice shall include
a list of reasons for said suspension and a list of any specific violations of law, bylaw, or rule,
and shall specify which operations of the credit union may be continued during the period of
suspension. The notice shall also fix a time and place for a hearing before the commissioner of
commerce or such person or persons as the commissioner of commerce may designate. The
hearing shall be held within 60 days of the notice of suspension. Evidence may be produced at
said hearing by any party thereto, and the commissioner of commerce shall base the decision as to
the continued suspension of operation of the credit union upon said evidence. If the commissioner
of commerce decides to continue the suspension, the commissioner shall give notice of the
decision to the board of directors of the credit union.
Subd. 3.[Repealed, 2005 c 118 s 18
Subd. 4. Consent cease and desist order.
In lieu of suspension of the operation of the credit
union, the commissioner of commerce and the board of directors of the credit union may agree
to execute a consent cease and desist order in which the parties agree to waive the right to a
hearing and agree that the credit union shall cease and desist from unsafe or unsound practices, or
violations. The order must specify whether credit union operation may continue, and if operation
may continue, the conditions under which operation may continue.
History: 1967 c 51 s 3; 1978 c 674 s 60; 1983 c 260 s 17; 1983 c 289 s 114 subd 1; 1984 c
655 art 1 s 92; 1985 c 248 s 70; 1986 c 444; 1997 c 157 s 38,39; 2005 c 118 s 6
52.063 PROCEEDINGS FOLLOWING SUSPENSION, CONTINUATION OF
SUSPENSION, OR CONSENT CEASE AND DESIST ORDER; APPOINTMENT OF
NATIONAL CREDIT UNION ADMINISTRATION BOARD AS RECEIVER.
Subdivision 1. Proceedings following suspension or continuation of suspension.
receipt of the suspension notice or the notice of the continuation of suspension under section
52.062, subdivision 2
or 3, the credit union shall immediately cease or continue cessation of all
operations except those operations specifically authorized by the commissioner of commerce. If
the notice is given pursuant to determination by the commissioner of commerce after a hearing,
the board of directors shall have 60 days from the receipt of said notice in which to file with the
commissioner of commerce a proposed plan of corrective actions or to request that a receiver
be appointed for the credit union. The commissioner of commerce shall have 30 days from
the receipt of the proposed plan of corrective actions to determine if the proposed corrective
actions are sufficient to correct the deficiencies which formed the basis for the suspension. If the
commissioner of commerce determines that the proposed corrective actions are sufficient, the
suspension shall be lifted and the credit union returned to normal operations under its board of
directors. If the commissioner of commerce believes the proposed corrective actions insufficient,
or if the board has failed to answer the suspension notice, or has requested that a receiver be
appointed, then the commissioner of commerce shall apply to the district court for appointment of
a receiver. The credit union shall have the right, within six months of the receipt of any notice of
suspension or continuation of suspension pursuant to a determination by the commissioner of
commerce after hearing, to appeal to the district court for a ruling as to the validity of such notice.
Subd. 2. Proceedings following consent cease and desist order.
If the commissioner of
commerce and the board of directors of the credit union execute a consent cease and desist order
in lieu of a suspension under section
52.062, subdivision 4
, the board of directors of the credit
union may request that the commissioner of commerce seek court appointment of a receiver for
the credit union. The consent cease and desist order must state that the credit union has requested
that the commissioner seek appointment of a receiver.
Subd. 3. Appointment of National Credit Union Administration Board as receiver.
a request by the commissioner of commerce, the court may appoint the National Credit Union
Administration Board, created by section 3 of the Federal Credit Union Act, as amended, as
receiver of a credit union, without bond, when the deposits of the credit union are to any extent
insured by the National Credit Union Administration Board, and the credit union has had its
operations suspended or has executed a consent cease and desist order with the commissioner
in lieu of a suspension under section
. Notwithstanding any other provisions of law, the
commissioner of commerce may, in the event of the suspension or consent cease and desist order,
tender to the National Credit Union Administration Board the proposed appointment as receiver
of the credit union. If the National Credit Union Administration Board accepts the proposed
appointment and the court appoints the National Credit Union Administration Board as receiver
upon a request by the commissioner, the National Credit Union Administration Board shall have
and possess all the powers and privileges provided by the laws of this state and section 207 of the
Federal Credit Union Act, as amended, with respect to a receiver of a credit union, the board of
directors of the credit union, and its members.
History: 1967 c 51 s 4; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1997 c 157 s 40
Subdivision 1. Ceasing operations; planning for return.
A receiver shall take possession
and control of all the books, assets, and records of the credit union, which shall not be subject
to any levy or attachment, and shall cease or continue cessation of all operations except those
which have been authorized by the court. For a period of 90 days after the appointment of the
receiver, or such longer time as the court may prescribe, the receiver, the board of directors of
the credit union, or any group of 15 members of the credit union may apply to the court for
permission to file, and if permitted may file, a plan of reorganization, merger, or consolidation
for the credit union. If such plan is approved by the commissioner of commerce and the court,
the books, assets, and records of the credit union shall be returned to the members pursuant to
the plan, and the receiver shall be discharged.
Subd. 2. Winding up.
If a plan of reorganization, merger, or consolidation is not submitted
during the 90 day period, or such other period allowed by the court, or if any such plan is not
approved by the commissioner of commerce and the court, the receiver shall proceed to collect
and distribute the assets of the credit union, discharge its debts, and do such other acts required in
order to wind up its business, and may sue and be sued for the purpose of enforcing its claims,
debts, and obligations until its affairs are completed and the receiver discharged. The receiver
shall use the assets of the credit union to pay first, expenses incidental to the receivership and
liquidation proceedings; second, any creditors other than depositors; and third, depositors. Assets
then remaining shall be distributed to the members proportionately to shares held by each member
as of the date the receiver is appointed.
Subd. 3. Waiver when credit union requests appointment of National Credit Union
Administration Board as receiver.
If the board of directors of the credit union has made a
request to the commissioner of commerce to seek court appointment of the National Credit Union
Administration Board as its receiver, and the commissioner elects to seek this appointment, then
the board of directors of the credit union may waive the right to apply to the court for permission
to file, and the right to file, a plan of reorganization, merger, or consolidation for the credit union
within 90 days of the appointment of the receiver under subdivision 1. The board of directors
of the credit union may waive this right on behalf of itself, and on behalf of the members of the
credit union, when the board of directors of the credit union determines that such action is in
the best interests of the credit union and its members, so that the deposit insurer may proceed
expeditiously to wind up the affairs of the credit union upon appointment as receiver.
History: 1967 c 51 s 5; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1997 c 157 s 41
52.07 FISCAL YEAR; MEETINGS; VOTING.
The fiscal year of all credit unions shall end December 31. General and special meetings may
be held in the manner and for the purposes indicated in the bylaws. At least ten days before any
regular meeting, and at least seven days before any special meeting, written notice shall be mailed
or handed to each member, and in the case of a special meeting, the notice shall clearly state the
purpose of the meeting and what matters will be considered thereat. No member shall be eligible
to vote at any meeting or to hold any office unless the member owns at least one share of the credit
union which is fully paid. At all meetings a member shall have but a single vote, whatever the
member's share holdings. Upon resolution of the board of directors, credit union members shall be
authorized to vote by mail for election of directors, credit committee and supervisory members
and amendments to bylaws at annual and special meetings. There shall be no voting by proxy. Any
firm, society or corporation having a membership in the credit union and entitled to vote may cast
its vote by one person upon presentation of written authority of the firm, society or corporation.
History: (7774-7) 1925 c 206 s 7; 1933 c 346 s 2; 1937 c 213 s 2; 1943 c 20 s 1; 1976 c
176 s 2; 1986 c 444
52.08 ANNUAL MEETING.
At the annual meeting the credit union shall elect a board of directors of not less than five
members and may elect a credit committee of not less than three members, all to hold office for
the terms provided in the bylaws and until successors qualify. The credit union must have a
supervisory committee. Pursuant to its bylaws, the credit union may elect a supervisory committee
of not less than three members nor more than five members, or the board of directors may appoint
the supervisory committee. Some or all of the terms of office may be staggered, as provided in the
bylaws. A record of the names and addresses of the members of the board and committees and the
officers shall be filed with the commissioner of commerce within ten days of their election. A
full-time manager of a credit union may be a director of a credit union operating under this chapter.
The organization meeting shall be the first annual meeting.
History: (7774-8) 1925 c 206 s 8; 1961 c 331 s 5; 1965 c 724 s 1; 1982 c 429 s 2; 1983 c
289 s 114 subd 1; 1984 c 655 art 1 s 92; 1988 c 597 s 1; 1991 c 42 s 3
52.09 DIRECTORS; POWERS AND DUTIES.
Subdivision 1. Meetings; officers.
At their first meeting, and annually thereafter at the
first meeting following the annual meeting of members, the directors shall elect from their own
number a president, vice-president, and from their own number or otherwise a treasurer, and
secretary, of whom the last two named may be the same individual, and the directors may engage
such other employees as may be necessary to properly conduct the business of the credit union.
Subd. 2. Particular duties.
The directors shall manage the affairs of the credit union and
(1) act on applications for membership. This power may be delegated to a membership chair
who serves at the pleasure of the board of directors and is subject to its rules. An application
must contain a certification signed by the membership chair or a member of the board showing
the basis of membership;
(2) determine interest rates on loans and on deposits. The interest period on deposits may
be on a daily, monthly, quarterly, semiannual, or annual basis, and may be paid on all deposits
whether or not the deposits have been withdrawn during the interest period. Interest may be
computed on a daily basis;
(3) fix the amount of the surety bond required of all officers and employees handling money;
(4) declare dividends and transmit to the members recommended amendments to the bylaws;
(5) fill vacancies in the board and in the credit committee until successors are chosen and
qualify at the next annual meeting;
(6) limit the number of shares and deposits which may be owned by a member, not to
exceed ten percent of the outstanding shares and deposits, or $2,000, whichever is larger, and
the maximum individual loan which can be made with and without security, including liability
indirectly as a comaker, guarantor, or endorser to ten percent of outstanding shares and deposits.
The ten percent share and deposit limitation is not applicable to the Minnesota corporate credit
union, or to credit unions insured by the National Credit Union Administration;
(7) have charge of investments including loans to members. If a credit committee is
established pursuant to section
or clause (13), then the credit committee shall have charge
of loans to members;
(8) fix the salaries of the treasurer and other employees, which must be on a fixed monthly
or annual basis, in dollars (not percentage);
(9) designate the depository institution in which the funds of the credit union will be
(10) authorize the officers of the credit union to borrow money from any source, as provided
(11) with the permission of the commissioner of commerce, suspend any member of the
credit committee or supervisory committee if it deems this action necessary to the proper conduct
of the credit union, and call the members together to act on the suspension within a reasonable
time after the suspension. The members at the meeting may, by majority vote of those present,
sustain the suspension and remove the committee members permanently or may reinstate the
(12) provide financial assistance to the supervisory committee in carrying out its audit
(13) if the bylaws so provide and no credit committee has been elected pursuant to section
, appoint a credit manager or a credit committee of not less than three members; and
(14) to establish different classes of shares.
Subd. 3. Officers, bylaws; compensation.
The duties of the officers shall be as determined
in the bylaws, except that the treasurer may be the general manager. No member of the board,
the supervisory committee or an elected credit committee shall receive a salary as such, but
may be reimbursed for necessary expenses incurred while serving in such capacity and may be
compensated for time actually spent in official duties at an hourly rate as determined by the annual
meeting of members. Provision of reasonable health, accident, and similar insurance protection
shall not be considered compensation, and is subject to approval by the membership.
Subd. 4. Officers' titles.
Notwithstanding the other provisions of this chapter, the bylaws
may provide that the position of president and vice-president of the directors as set forth in this
chapter be designated chair of the board and vice-chair, and if so designated, the position of
manager or general manager as set forth in this chapter may be designated president, and one
or more vice-presidents may be appointed. If the position of manager or general manager is
designated president pursuant to this section, the treasurer may be the president. A change of titles
pursuant to this section does not change the powers and duties of the position.
Subd. 5. Elimination or limitation of liability.
A director's personal liability to the credit
union or its members for monetary damages for breach of fiduciary duty as a director may be
eliminated or limited in the bylaws. The bylaws shall not eliminate or limit liability of a director:
(1) for breach of the director's duty of loyalty to the credit union or its members;
(2) for acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law;
(3) for a transaction from which the director derived an improper personal benefit; or
(4) for an act or omission occurring prior to the date when the provision in the bylaws
eliminating or limiting liability becomes effective.
History: (7774-9) 1925 c 206 s 9; 1937 c 213 s 3; 1945 c 540 s 3; 1955 c 453 s 2; 1961 c
331 s 6; 1963 c 384 s 2,3; 1967 c 301 s 2,3; 1971 c 154 s 6; 1979 c 149 s 2; 1981 c 73 s 2; 1982 c
429 s 3,4; 1983 c 43 s 2; 1983 c 289 s 114 subd 1; 1984 c 512 s 4; 1984 c 655 art 1 s 92; 1986 c
444; 1987 c 349 art 1 s 29; 1989 c 304 s 130; 1991 c 42 s 4; 2002 c 339 s 7
52.10 CREDIT COMMITTEE; CREDIT MANAGER; POWERS.
Subdivision 1. Authority of credit committee.
The credit committee shall have the general
supervision of all loans to members as provided herein. Applications for loans shall be on a form
prepared by the credit committee, shall set forth the purpose for which the loan is desired, the
security, if any, offered and such other data as may be required. Within the meaning of this section,
an assignment of shares or deposits or the endorsement of a note may be deemed security. Except
where the credit committee approves the extension of a self-replenishing line of credit pursuant
52.16, subdivision 2
, at least a majority of the members of the credit committee shall
pass on all loans and approval must be in writing and by unanimous vote of the members present.
The credit committee shall meet as often as may be necessary after due notice to each member
of the committee. In the case of any credit union having total assets in excess of $10,000, the
board of directors may authorize the credit committee to appoint one or more loan officers. Loan
officers, subject to the supervision of the committee, may be delegated authority by the credit
committee to act on all or some applications for loans and to approve them, reporting thereon
to the credit committee at their next meeting or within 15 days. The credit committee and the
board of directors, meeting jointly and acting collectively as a whole, shall have the general
supervision of all loans to a member who is a director, officer, or a member of the credit or
supervisory committee whenever the application exceeds the amount of the member's holdings in
shares and deposits. Application for these loans shall be in similar form as may be required to be
furnished to the credit committee for a loan in the case of any other member. At least a majority of
the members of the credit committee and of the board of directors at a joint meeting and acting
collectively as a whole, shall pass on all such loans in the absence of the applicant, and the
approval of the loan must be in writing and by unanimous vote of all members present. The credit
committee and the board of directors shall meet for this purpose as often as may be necessary
after due notice to each member of the board and credit committee.
Subd. 2. Authority of credit manager.
If a credit manager is appointed, the board shall have
the powers and responsibilities described in subdivision 1 for a credit committee. The board may
delegate in writing any or all of these powers and responsibilities to a credit manager.
History: (7774-10) 1925 c 206 s 10; 1943 c 647 s 2; 1945 c 540 s 4; 1955 c 453 s 3; 1967 c
301 s 4; 1978 c 663 s 1; 1982 c 429 s 5
52.11 SUPERVISORY COMMITTEE; DUTIES.
The supervisory committee shall:
(1) make an examination of the affairs of the credit union at least semiannually, in June and
December, including an audit of its books and, in the event the committee feels such action to be
necessary, it shall call the members together thereafter and submit to them its report;
(2) make an annual report of its audits and submit the same at the annual meeting of the
(3) by unanimous vote, if it deem such action to be necessary to the proper conduct of
the credit union, suspend any officer, director, or member of committee, and call the members
together to act on the suspension. The members at the meeting may, by majority vote of those
present, sustain the suspension and remove an officer permanently, or may reinstate the officer.
By majority vote, the supervisory committee may call a special meeting of the members to
consider any matter submitted to it by the committee. The committee shall fill vacancies in its
own membership until successors are chosen and qualify at the next annual meeting.
History: (7774-11) 1925 c 206 s 11; 1937 c 213 s 4
52.12 CAPITAL; ENTRANCE FEES; CREDIT UNION TO HAVE LIEN.
The capital of a credit union includes shares, share certificates, any special class of shares,
undivided earnings, reserves, member investment shares, nonmember subordinated debt, member
paid-in capital, and any entrance or membership fees. The credit union shall have a lien on the
shares and deposits of a member for any sum due to the credit union from the member, or for any
loan endorsed by that member. In addition to any other statutory right of setoff or lien and subject
to any contractual provision, if any party to an account is indebted to a credit union, the credit
union has a right to setoff against any account in which the party has or had immediately before
death a present right of withdrawal. A credit union may, at its discretion, charge an entrance or
annual membership fee if authorized by the bylaws.
History: (7774-12) 1925 c 206 s 12; 1971 c 154 s 7; 1984 c 512 s 5; 1986 c 444; 1993 c
257 s 32; 2002 c 339 s 8
52.13 DEPOSITS IN NAME OF MINOR.
Any deposit made in the name of a minor, or shares issued in a minor's name, shall be held
for the exclusive right and benefit of the minor, free from the control or lien of all other persons
except creditors, and together with the dividends or interest thereon shall be paid to the minor; and
the minor's receipt, check, or acquittance in any form shall be a sufficient release and discharge
of the depository for the deposits or shares, or any part thereof, until a conservator or guardian
appointed for the minor shall have delivered a certificate of appointment to the depository.
Deposits may be accepted pursuant to the authority set forth in chapter 527, provided that either
the custodian or the minor is a member of the credit union accepting the deposit.
History: (7774-13) 1925 c 206 s 13; 1949 c 88 s 6; 1961 c 331 s 7; 1985 c 292 s 6; 1997
c 157 s 42
52.131 MULTIPARTY ACCOUNTS.
When any deposit is made in the names of two or more persons jointly, or by any person
payable on death (P.O.D.) to another, or by any person in trust for another, the rights of the parties
and the financial institution are determined by chapter 524.
History: 1985 c 292 s 7; 1996 c 414 art 1 s 21
52.137 INDIVIDUAL RETIREMENT ACCOUNTS.
52.04, subdivision 1
, clause (1), and
, a credit union may
receive payment as deposits to establish an individual retirement account for the spouse of a
blood or adoptive relative of a regularly qualified member if the blood or adoptive relative is a
member of the credit union.
History: 1994 c 382 s 9
52.14 INTEREST ON LOANS.
Subdivision 1.[Repealed, 1982 c 494 s 5
Subd. 2. Maximum allowable rate.
Interest rates on unpaid balances of loans made by a
credit union shall not exceed one percent a month or the rate of interest authorized by section
, whichever is greater at the time the loan is made. If the rate of interest charged is
permitted by section
at the time the loan is made, the rate does not later become usurious
because of a fluctuation in the federal discount rate.
History: (7774-14) 1925 c 206 s 14; 1980 c 522 s 3; 1982 c 494 s 4
52.141 LOAN EXPENSES.
In addition to the interest charged on loans, the borrowing member may be required to pay
all reasonable expenses incurred in connection with the making, closing, disbursing, extending,
readjusting, or renewing of personal or real estate loans. The commissioner of commerce may
prescribe by rule which of said expenses may be charged to the member and may further prescribe
maximum amounts which may be charged.
History: 1967 c 301 s 5; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1985 c 248 s 70
52.15 BORROWING, LIMITATION.
Subdivision 1. Fifty percent of unimpaired assets.
A credit union may borrow from any
source, or sources, sums not exceeding in the aggregate 50 percent of its unimpaired assets. For
the purposes of this subdivision, "unimpaired assets" mean total assets less borrowings, including
all forms of indebtedness, accounts payable, and any amount by which reserves and undivided
earnings will not be adequate to meet the reserve requirements caused by classified assets.
Subd. 2. More borrowing for liquidity needs.
Notwithstanding the provisions of
subdivision 1, a credit union, with the prior written approval of the commissioner of commerce,
may borrow additional sums to meet its liquidity needs. For purposes of this subdivision,
"liquidity needs" means the needs of a credit union for:
(a) Short-term adjustment credit to cushion deposit or share outflows pending an orderly
adjustment of assets and liabilities;
(b) Seasonal needs arising from a combination of expected patterns of movement in share
and deposit accounts and loans; and
(c) Protracted adjustment needs in the event of unusual or emergency circumstances of a
longer-term nature resulting from national, regional or local difficulties. Applications for written
approval shall include the specific dollar amount or increase in the aggregate percentage with
respect to unimpaired assets that may be borrowed by the credit union and the period of time the
additional borrowed sums will be needed. The commissioner's approval must state the specific
dollar amount or increase in the aggregate percentage being approved and the period of time
for which the approval is effective.
History: (7774-15) 1925 c 206 s 15; 1943 c 647 s 3; 1961 c 331 s 13; 1979 c 149 s 3; 1983 c
43 s 3,4; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 2002 c 339 s 9
52.16 MAY LOAN MONEY, CONDITIONS.
Subdivision 1. Purposes; repayment; loans involving officers.
A credit union may loan
to members. Loans must be for a provident or productive purpose and are made subject to the
conditions contained in the bylaws. A borrower may repay a loan, in whole or in part, any day
the office of the credit union is open for business. Except for loans secured by first real estate
mortgages on homes owned and occupied, of the character made to other members, no director,
officer, or member of the credit or supervisory committee may become liable, as a borrower
or endorser for other borrowers, or both, to the credit union in which that person holds office,
beyond the amount of the person's holdings in shares and deposits therein, unless the loan shall
have been approved in the manner provided by section
Subd. 2. Self-replenishing line of credit.
Upon application by a member, the credit
committee may approve in advance a self-replenishing line of credit, and advances may be
granted to a member within the limit of the extension of credit. Where a self-replenishing line of
credit has been approved, additional loan applications may be required.
History: (7774-16) 1925 c 206 s 16; 1943 c 647 s 4; 1978 c 663 s 2; 1986 c 444
52.165 GRADUATED PAYMENT HOME LOAN.
Subdivision 1. Definition.
As used in this section, "graduated payment home loan" means a
real estate loan made pursuant to section
, whereunder initial periodic repayments are lower
than those under the standard real estate loan having equal periodic repayments, and gradually
rise to a predetermined point after which they remain constant.
Subd. 2. Authorization.
Notwithstanding the provisions of section
334.01, subdivision 1
subject to the provisions of section
47.201, subdivisions 4 to 6
, a credit union may make graduated
payment home loans and purchases representing graduated payment home loans pursuant to such
rules as the commissioner of commerce finds to be necessary and proper, if any, at an interest rate
not in excess of the rate prescribed in section
. Notwithstanding the provisions of section
334.01, subdivision 1
, where initial repayments of a graduated payment home loan are less than
the total accrued outstanding interest, the excess accrued and unpaid interest may be added to the
outstanding loan balance on which interest accrues at the contracted rate.
History: 1979 c 239 s 2; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92
52.17 RESERVE FUND.
Subdivision 1.[Repealed, 2002 c 342 s 11
Subd. 2. Required liquidity.
Every credit union shall maintain a reserve in the form of
liquid assets at a level reasonably necessary to meet anticipated withdrawals, commitments, and
loan demand. Reserves must be in cash and balances due from solvent banks or which may be, in
whole or in part, in short term obligations guaranteed as to principal and interest by the United
States government or in certificates of deposit of a federally insured bank or in a passbook or
other account in a federally insured savings association or in balances due from the Minnesota
Corporate Credit Union or ICU Services Corporation or United States Central Credit Union. The
commissioner of commerce may prescribe the required amount of reserves for any individual
credit union from time to time based upon examination findings or other reports relating to the
credit union that are available to the commissioner. Reserves for an individual credit union as
prescribed by the commissioner pursuant to this section shall be enforced in accordance with
History: (7774-17) 1925 c 206 s 17; 1933 c 346 s 3; 1937 c 213 s 5; 1971 c 154 s 8; 1973
c 740 s 5; 1975 c 394 s 2; 1978 c 642 s 1; 1980 c 492 s 1; 1981 c 182 s 5; 1982 c 424 s 130;
1983 c 43 s 5; 1983 c 289 s 114 subd 1; 1984 c 512 s 6; 1984 c 655 art 1 s 92; 1989 c 127 s 2;
1995 c 202 art 1 s 25; 1997 c 187 art 3 s 11
The directors of a credit union may, on a daily, monthly, quarterly, semiannual, or annual
basis as its board of directors may determine, declare and pay a dividend from net earnings or
accumulated net undivided profits remaining after statutory reserve has been set aside, which
dividend may be paid on all shares whether or not they have been withdrawn during the dividend
period. Dividends may be computed on a daily basis. The board of directors may classify its
share accounts according to character, amount and duration and declare dividends which may be
at variable rates with due regard to the conditions that pertain to each class of shares, or pay no
dividend at all. A dividend shall be uniform within a classification. Shares which become fully
paid up during a dividend period shall be entitled to a proportional part of the dividend calculated
from the first day of the month following the payment in full. For the purpose of this section,
shares which become fully paid up by the 15th day of any month may be treated as being paid
up from the first day of the month.
History: (7774-18) 1925 c 206 s 18; 1937 c 213 s 6; 1961 c 331 s 8; 1967 c 301 s 6; 1971 c
154 s 9; 1973 c 740 s 6; 1976 c 176 s 3; 1984 c 512 s 7; 1987 c 349 art 1 s 30
52.19 EXPULSION OR WITHDRAWAL OF MEMBERS.
Subdivision 1. General regulation.
A member may be expelled by a two-thirds vote of the
members present at a special meeting called to consider the matter, but only after a hearing. A
member may also be expelled by the board of directors in accordance with a procedure and policy
under subdivision 2. Any member may withdraw from the credit union at any time, but notice
of withdrawal may be required. All amounts paid on shares or as deposits of an expelled or
withdrawing member, with any dividends or interest accredited thereto, to the date thereof, shall,
as funds become available and after deducting all amounts due from the member to the credit
union and an amount as necessary to honor outstanding share drafts drawn against the accounts of
the member, be paid to the member. The credit union may require 60 days' notice of intention to
withdraw shares and 30 days' notice of intention to withdraw deposits, except that a credit union
shall not at any time require notice of withdrawal of funds subject to withdrawal by share drafts.
Withdrawing or expelled members shall have no further right in the credit union, but are not, by
the expulsion or withdrawal, released from any remaining liability to the credit union.
Subd. 2. Board procedure and policy.
The board of directors may adopt a procedure and
policy for expulsion of members for cause and for nonparticipation in the affairs of the credit
union. The nonparticipation policy must be based on:
(1) failure to purchase and maintain at least one credit union share or to pay entrance or
membership fees, if any; or
(2) causing monetary loss to the credit union.
If adopted, written notice of the procedure and policy and their effective date shall be mailed not
less than 30 days before their effective date to each member of the credit union at the member's
address on the credit union records. Each new member shall be provided written notice of the
procedure and policy before or upon applying for membership.
History: (7774-19) 1925 c 206 s 19; 1981 c 316 s 2; 1986 c 444; 1988 c 597 s 2; 2002
c 339 s 10
52.191 INACTIVE ACCOUNTS.
Whenever a member's share or deposit balance is less than $25 and the member has not
transacted any business with the credit union for a period of at least three years, the board of
directors, after giving 30 days' written notice by certified mail to the last known address of the
member, may transfer the balance to the operating reserve fund of the credit union. Thereafter,
subject to the law governing abandoned funds, the member may recover the funds in the account
at the time of the transfer by making application to the credit union for such funds, but the credit
union shall have no obligation to the member for the payment of dividends or interest on the
funds after the transfer to the operating reserve.
History: 1969 c 453 s 1; 1994 c 382 s 10
52.20 VOLUNTARY DISSOLUTION.
Subdivision 1. Special meeting; liquidation committee.
A credit union may be voluntarily
liquidated after two-thirds of the members present and entitled to vote shall have voted such
liquidation at a special meeting called by a majority of the board of directors for that purpose,
upon 14 days mailed written notice to each member at the member's last known address clearly
stating the purpose of the special meeting, or at any regular meeting after like notice of the
purpose has been given. By a majority vote of the members present and entitled to vote at the
meeting, a committee of three members shall be elected to liquidate the credit union.
Vacancies in this committee shall be filled by the remaining members of the committee,
acting jointly with the board of directors serving at the time of the vote for liquidation, or by
and with the approval of any ten or more shareholders. In case the remaining members of the
committee or a majority of said board of directors shall notify the commissioner of commerce
that a vacancy can not be filled in the manner therein provided, the commissioner shall have
authority to fill the vacancy from the membership of the credit union as it existed at the time
of the vote for liquidation.
Subd. 2. Recording documents; commissioner's approval; bond.
Immediately after this
meeting and before the committee shall proceed with the liquidation, the officers of the credit
union shall file with the commissioner of commerce a certified copy of the minutes of this meeting,
a written statement outlining the plan of liquidation, and a verified statement, in writing, signed
by a majority of the officers, consenting to this liquidation containing the names and addresses of
all officers and directors of the credit union. After the commissioner of commerce shall, by proper
examination, determine that the credit union is solvent, the commissioner shall, within 60 days,
issue a certificate of approval of the liquidation, which certificate shall be recorded with the county
recorder in the county where the credit union is located. A "solvent" credit union is one which
is able to pay all of its debts and deposits. From and after this special meeting the credit union
shall cease to do business except for purposes of liquidation. Before commencing the liquidation
the committee shall execute and file with the commissioner of commerce a bond running to the
state of Minnesota for the benefit of the members and creditors of the credit union in such amount
and with such sureties and in such form as shall be approved by the commissioner of commerce,
conditioned for the faithful performance of all duties of its trust. A bond may be waived in case
of a bulk sale of assets to one or more purchasers upon terms approved by the commissioner of
commerce. Such purchasers may include other credit unions or an association of credit unions.
Subd. 3. Time of dissolution.
Upon recording this certificate with the county recorder, the
credit union shall be deemed dissolved and its corporate existence terminated except for the
purpose of discharging its debts, collecting and distributing its assets, and doing all other acts
required in order to liquidate. The credit union shall have a corporate existence and may sue
and be sued.
Subd. 4. Commissioner's intervention.
If the credit union shall not be completely liquidated
and its assets discharged within three years after the special meeting of the members, the
commissioner of commerce may take possession of the books, records and assets and proceed to
complete liquidation. If the commissioner determines after one year from the commencement
of liquidation proceedings that the liquidation is not proceeding in a reasonable and expeditious
manner under all of the circumstances, the commissioner may take possession of the books,
records, and assets and appoint a liquidating agent who shall give a bond running to the state of
Subd. 5. Unclaimed dividends.
Funds representing unclaimed dividends in liquidation in
the hands of the liquidating committee or the commissioner of commerce for six months after
date of final dividend, shall be deposited with the commissioner of finance, who shall, within
one year thereafter, pay over the money so held to the persons respectively entitled thereto upon
being furnished satisfactory evidence of their right to the same, and at the end of that year the
commissioner of finance shall credit all residue of the deposit to the general fund.
There is hereby appropriated to the persons entitled to such amounts, from the funds or
accounts in the state treasury to which the money was credited, an amount sufficient to make the
Subd. 6. Final statement.
Upon completion of the liquidation by the liquidating committee,
it shall file with the commissioner of commerce a verified statement in writing signed by the
members of the committee stating that all debts of the credit union, and all deposits, and all
shares, or portions of shares which can be paid from the liquidation proceeds, have been paid,
except any unclaimed dividends, and if any such, the amount thereof, the names of the persons
entitled thereto, with their last known addresses, and all books and papers of the credit union shall
thereupon be deposited with the commissioner of commerce.
History: (7774-20) 1925 c 206 s 20; 1933 c 346 s 4; 1937 c 213 s 7; 1943 c 20 s 2; 1959 c
158 s 5; 1961 c 331 s 9; 1967 c 301 s 7-9; 1969 c 399 s 1; 1971 c 154 s 10; 1976 c 181 s 2; 1983
c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1986 c 444; 2003 c 112 art 2 s 50; 2005 c 4 s 4,5
52.201 REORGANIZING FEDERAL CREDIT UNION INTO STATE CREDIT UNION.
When any federal credit union authorized to convert to a state charter has taken the necessary
steps under the federal law for that purpose, seven or more members, upon authority of two-thirds
of the members present and entitled to vote and who shall have voted for such conversion at a
regular or special meeting upon 14 days mailed written notice to each member at the member's
last known address clearly stating that such conversion is to be acted upon, and upon approval of
the commissioner of commerce, may execute a certificate of incorporation under the provisions of
the state Credit Union Act, which, in addition to the other requirements of law, shall state the
authority derived from the shareholders of such federal credit union; and upon recording such
certificate as required by law, it shall become a legal state credit union and the members of
the federal credit union shall without further action be members of the state credit union. This
includes members of the federal credit union on the basis of acceptance of small employer groups
provided the commissioner may require contemporaneous filing of applications under section
52.05, subdivision 2
. Thereupon the assets of the federal credit union, subject to its liabilities not
liquidated under the federal law before such incorporation, shall vest in and become the property
of such state credit union and the members upon request shall be entitled to a new passbook
showing existing share and loan balances. The commissioner of commerce shall approve or
disapprove of the conversion within 60 days of the date the proposal is presented.
History: 1941 c 510 s 1; 1961 c 331 s 10; 1971 c 154 s 11; 1983 c 289 s 114 subd 1; 1984 c
655 art 1 s 92; 1986 c 444; 1997 c 157 s 43
52.202 DIRECTORS MAY EXECUTE CERTIFICATES.
When any state credit union authorized to dissolve has taken the necessary steps for that
purpose, pursuant to section
, excepting the necessity for the appointment of a liquidating
committee and filing a bond, the number of its members required by federal law may execute a
certificate of incorporation under the provisions of the Federal Credit Union Act, which federal
credit union shall be regarded as continuing the existence of the state credit union. Upon approval
of the conversion by the federal regulatory agency and upon recording of such certificates as
required by law the state credit union shall be fully dissolved. Any officer of the state credit
union, or member of supervisory and credit committees, elected to a corresponding office in the
federal credit union shall be regarded as holding over such office from the state credit union
to the federal credit union.
History: 1941 c 510 s 2; 1961 c 331 s 11
Any credit union chartered by this state may merge with and be absorbed by any other state
or federal credit union, and any credit union chartered by this or any other state or any federal
credit union may be merged into a successor credit union chartered by this state, upon approval of
all regulatory agencies concerned, and upon compliance with this section as regards the credit
union chartered by this state. At the time of filing with the commissioner of any proposed merger
or consolidation plan, the credit unions proposing to merge or consolidate shall submit a fee of
$100 payable to the commissioner of commerce. The fee shall be paid in equal parts by the
credit unions' party to the proposal.
A credit union may be absorbed after two-thirds of its members present and entitled to
vote have voted in favor of the merger at a special meeting called by a majority of the board of
directors for that purpose, upon 14 days mailed written notice to each member at the member's
last known address clearly stating the purpose of the special meeting, or at any regular meeting
after like notice of the purpose has been given. Thereafter, the board of directors may execute an
agreement of merger with the successor credit union, subject to approval of the agreement by the
commissioner of commerce. The commissioner shall approve or disapprove of the agreement
within 60 days of the date the agreement is submitted. The approved agreement must be filed
with the secretary of state.
If the successor credit union which absorbs one or more credit unions is chartered by this
state it may execute an agreement of merger upon approval of the agreement by the commissioner
of commerce and by the board of directors of the credit union. The commissioner of commerce
shall approve the merger agreement if it is in the best interest of the credit unions involved. In any
event, the commissioner of commerce shall approve or disapprove of the merger agreement within
60 days of the date the agreement is submitted. Members of, and persons eligible for membership
in, the credit union being absorbed have all rights of membership in the successor credit union.
The charter and license and all other rights and property of the credit union being absorbed
is deemed to be transferred to and invested in the successor credit union upon execution and
approval of the merger agreement without further action. Any pending action or other judicial
proceeding to which the credit union being absorbed is a party at the date of merger does not abate
by reason of the merger. If the credit union being absorbed is chartered by this state, its corporate
existence ceases upon the execution and approval of the merger agreement without further action.
History: 1961 c 331 s 12; 1967 c 63 s 1; 1971 c 154 s 12; 1976 c 181 s 2; 1977 c 16 s 1;
1983 c 250 s 18; 1984 c 576 s 18; 1986 c 444
52.21 CHANGE OF PLACE OF BUSINESS.
A credit union may change its place of business within this state only with the written
consent of the commissioner of commerce. The commissioner of commerce shall consent, or
give notice to the credit union of failure to consent, within 60 days of the date the request for
a change of place of business is submitted.
History: (7774-21) 1925 c 206 s 21; 1931 c 213 s 8; 1971 c 154 s 13; 1983 c 289 s 114 subd
1; 1984 c 655 art 1 s 92; 1986 c 444
52.211 STUDENT EDUCATION PROGRAMS.
A credit union is allowed to establish part-time deposit-taking locations at elementary and
secondary schools provided that the locations are established in connection with student education
programs approved by the school administration and consistent with safe and sound financial
institution practices. For purposes of this section, students do not need to be members of the credit
union to participate, and the students' parents are not eligible to become members solely by
reason of their child's participation.
History: 1995 c 202 art 2 s 20
52.212 SENIOR CITIZEN LOCATIONS.
In addition to its primary member location, a credit union may operate part-time locations in
nursing homes and senior citizen housing facilities if they are operated in a manner consistent
with safe and sound practices.
History: 1999 c 151 s 27
52.24 MANDATORY SHARE AND DEPOSIT INSURANCE.
Subdivision 1. Insurance accounts.
Every credit union under the supervision of the
commissioner of commerce shall at all times maintain in effect insurance of member share and
deposit accounts under the provisions of title II of the National Credit Union Act. A credit union
which fails to meet this requirement for insurance of its share and deposit accounts shall either
dissolve or merge with another credit union which is insured under title II of the National Credit
Subd. 2. Certificate of approval.
No credit union shall be granted a certificate of approval
by the commissioner of commerce unless the credit union has obtained a commitment for
insurance of its member share and deposit accounts under the provisions of title II of the National
Credit Union Act.
Subd. 3. Exclusion.
Notwithstanding the provisions of subdivisions 1 and 2, any one share of
a member, as designated in the bylaws of the credit union, may be excluded from the requirement
for insurance. At the time a share so designated as an uninsured, nonwithdrawable membership
share is subscribed to, the person subscribing will be provided the following separate notification
printed in not less than the equivalent of 8-point type, 0.075 inch computer type, or elite-sized
typewriter numerals, or shall be legibly handwritten:
"Membership shares are not insured by any state or federal agency and may be used to pay
the expenses and losses of the credit union in the event all other available reserves have
History: 1976 c 219 s 3; 1982 c 473 s 19; 1983 c 289 s 114 subd 1; 1984 c 512 s 8; 1984 c
655 art 1 s 92; 1Sp1985 c 13 s 186,187; 1989 c 127 s 3,4; 1992 c 587 art 1 s 19; 1994 c 382 s 11