Code of Virginia

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Code of Virginia
Title 6.2. Financial Institutions and Services
Chapter 13. Credit Unions
6/28/2022

Article 7. Direction of Affairs.

§ 6.2-1348. Board of directors; number; election; term; appointment of supervisory and credit committees.

A. The board of directors shall have the authority and responsibility for directing the business affairs, funds, and records of the credit union.

B. The board shall consist of an odd number of directors, at least five in number, to be elected by and from the members. After the election of the initial board at the organizational meeting, the election of the board shall be held at the annual meeting or at such other time as the bylaws provide.

C. A director shall be elected for a term of not less than one year nor more than four years, as provided in the bylaws. If the term is more than one year, the bylaws shall establish terms of office so that an approximately equal number of directors shall be elected each year. A director, unless removed from office, shall hold office until a successor is elected and qualified. Directors may serve more than one term. Any vacancy on the board of directors shall be filled until the next annual election by appointment by the remainder of the directors.

D. The board of directors at its first meeting following the annual election shall appoint a supervisory committee from the membership. The supervisory committee shall consist of an odd number of members, not less than three. No member of the board of directors or the credit committee shall serve on the supervisory committee. The terms for the members of the supervisory committee shall be as provided in the bylaws.

E. Unless the members have authorized and directed the board of directors to serve as the credit committee, the board of directors at its first meeting following the annual election shall either appoint:

1. A credit committee, which shall be appointed from the membership. The credit committee shall consist of an odd number of members, not less than three. No member of the board of directors or the supervisory committee shall serve on the credit committee unless authorized by the provisions of this section. The terms for the members of the credit committee shall be as provided in the bylaws; or

2. One or more loan officers to carry out the duties and responsibilities of the credit committee.

Code 1950, § 6-219; 1966, c. 584, § 6.1-210; 1968, c. 560; 1982, c. 575; 1983, c. 301; 1990, c. 373, § 6.1-225.31; 2010, c. 794.

§ 6.2-1349. Board of directors; election of officers.

A. At its first meeting after the annual election, the board of directors shall elect from its own number (i) an executive officer, who may be designated as chairman of the board or president; (ii) a vice-chairman of the board or one or more vice-presidents; (iii) a secretary; and (iv) a treasurer. The same member may simultaneously hold more than one office in the credit union, if the bylaws so provide. The board of directors shall also elect any other officers that are specified in the bylaws.

B. The board of directors shall appoint (i) a chief operating officer of the credit union to be in active charge of its operations and (ii) a financial officer. The chief operating officer may also serve as the financial officer.

C. The terms of the officers shall be one year or until their successors are elected and qualified.

D. The duties of the officers shall be as prescribed in the bylaws.

E. A credit union may use any other title it chooses for officers, so long as such titles are not misleading.

Code 1950, § 6-220; 1964, c. 75; 1966, c. 584, § 6.1-211; 1968, c. 560; 1982, c. 572; 1983, c. 158; 1984, c. 354; 1988, c. 275; 1990, c. 373, § 6.1-225.32; 2010, c. 794.

§ 6.2-1350. Executive committee.

The board of directors may appoint from its own number an executive committee, consisting of not less than three directors. The executive committee may be authorized to act for the board in all respects, subject to such conditions and limitations as are prescribed by the board and subsection D of § 13.1-869.

1990, c. 373, § 6.1-225.33; 2010, c. 794.

§ 6.2-1351. Meetings of directors.

The board of directors and the executive committee shall meet as often as the bylaws prescribe.

Code 1950, § 6-220; 1964, c. 75; 1966, c. 584, § 6.1-211; 1968, c. 560; 1982, c. 572; 1983, c. 158; 1984, c. 354; 1988, c. 275; 1990, c. 373, § 6.1-225.34; 2010, c. 794.

§ 6.2-1352. Compensation of officials.

A. Compensation of members of the board of directors and members of the credit and supervisory committees shall be determined by a written policy approved by the board of directors, provided that annual compensation for an individual member does not exceed $6,000.

B. Health, accident, and term life insurance protection for a director or committee member shall not be considered compensation.

C. Directors and committee members, while on official business of the credit union, may be reimbursed for expenses consistent with Internal Revenue Service guidelines.

Code 1950, § 6-220; 1964, c. 75; 1966, c. 584, § 6.1-211; 1968, c. 560; 1982, c. 572; 1983, c. 158; 1984, c. 354; 1988, c. 275; 1990, c. 373, § 6.1-225.35; 1995, c. 325; 2010, c. 794; 2020, cc. 262, 547.

§ 6.2-1353. Powers and duties of directors.

In addition to any other duties set forth in this chapter, the board of directors shall have the following powers and duties:

1. To act upon applications for membership and upon the expulsion of a member. The board of directors may appoint one or more membership officers to act upon applications for membership. A record of the membership officer's approval or denial of membership shall be available to the board of directors for inspection. A person denied membership by a membership officer may appeal the denial to the board;

2. To purchase and maintain fidelity bond coverage, in accordance with regulations of the Commission;

3. To determine from time to time the rates of interest that shall be charged on loans and to prescribe the conditions under which interest refunds will be made;

4. To fix the amount, if any, that may be charged for initial and annual membership fees;

5. To determine the maximum amount of shares that may be held by, and the maximum amount which may be loaned to, any one member;

6. To declare dividends on share accounts;

7. To determine the manner in which dividends shall be paid on shares issued or withdrawn during a dividend period;

8. To fill vacancies in the supervisory committee or in the credit committee until the election or appointment, as the case may be, and qualification of successors;

9. To remove any member of the board of directors failing to attend regular meetings of the board without good cause shown for three consecutive months or otherwise failing to perform any of the duties devolving upon him as a director;

10. To remove any member of the credit committee failing to attend three consecutive regular meetings of the credit committee without good cause shown or otherwise failing to perform any of the duties devolving upon him as a credit committee member;

11. To suspend any member of the supervisory committee failing to attend regular meetings of the supervisory committee without cause or otherwise failing to perform any of the duties devolving upon him as a supervisory committee member, provided that the members shall decide at a meeting held not less than 10 nor more than 25 days after such suspension if such suspended committee member shall be removed from or restored to the supervisory committee;

12. To have charge of the investment of the funds of the credit union, except that the board of directors may designate an investment committee or any qualified individual to have charge of making investments pursuant to written policies established by the board of directors;

13. To establish policy on loans to members, which policy shall provide that the rates, terms, and conditions on any loan or line of credit either made to, or endorsed or guaranteed by (i) an official, (ii) an immediate family member of an official, or (iii) any individual having a common ownership, investment, or other pecuniary interest in a business enterprise with an official or with an immediate family member of an official shall not be more favorable than the rates, terms, and conditions for comparable loans or lines of credit to other credit union members;

14. To designate a depository or depositories for the funds of the credit union;

15. To authorize the acquisition or conveyance of real property;

16. To authorize the employment and compensation of the president or person named by the board to manage the affairs of the credit union;

17. To make adequate provisions for reserves; and

18. To perform such other duties as the members may from time to time authorize.

Code 1950, § 6-220; 1964, c. 75; 1966, c. 584, § 6.1-211; 1968, c. 560; 1982, c. 572; 1983, c. 158; 1984, c. 354; 1988, c. 275; 1990, c. 373, § 6.1-225.36; 2010, c. 794.

§ 6.2-1354. Credit committee or loan officers; appeal.

A. The credit committee of a credit union shall approve every loan or advance made by the credit union to members, unless the committee is replaced by a loan officer as provided in subdivision E 2 of § 6.2-1348.

B. If the credit committee has not been replaced by action of the board of directors, it may appoint and delegate to loan officers the authority to approve or disapprove loan applications, subject to the written policies prescribed by the board of directors. The approval of an application by the credit committee shall be by a majority of members of the committee who are present at the meeting at which it is considered, provided a majority of the full committee is present.

C. All applications disapproved by a loan officer may, upon request of the applicant, be reviewed by the credit committee. The approval of a majority of members of the credit committee who are present at the meeting when such review is undertaken shall be required to reverse the loan officer's decision. A majority of members of the full credit committee shall be present at such review. A member whose application was disapproved by a loan officer or the credit committee may appeal such action to the board of directors.

D. No individual shall have the authority to disburse funds of the credit union for any loan for which the application has been approved by him in his capacity as a loan officer.

E. The credit committee shall meet as often as the business of the credit union may require to consider applications for loans or to review the work of the loan officers, as the case may be. Reasonable notice of each such meeting shall be given to each member of the committee.

Code 1950, § 6-221; 1964, c. 75; 1966, c. 584, § 6.1-212; 1974, c. 143; 1983, c. 302; 1990, c. 373, § 6.1-225.37; 2010, c. 794.

§ 6.2-1355. Supervisory committee; suspension and removal of officials.

The supervisory committee:

1. Shall make or cause to be made an annual audit of the credit union, and shall submit a report of that audit to the board of directors and a summary of the report to the members at the next annual meeting of the credit union;

2. Shall make or cause to be made such supplementary audits and verification of members' accounts as it deems necessary or as may be ordered by the board of directors, and shall submit such report to the board of directors; and

3. May by unanimous vote suspend any officer of the credit union or any member of the credit committee or of the board of directors, until the next meeting of members, which shall be held not less than 10 nor more than 25 days after any such suspension, at which meeting such suspension shall be acted upon by the members.

Code 1950, § 6-222; 1966, c. 584, § 6.1-213; 1974, c. 106; 1982, c. 574; 1990, c. 373, § 6.1-225.38; 2010, c. 794.

§ 6.2-1356. Special audit.

The Commissioner may require a credit union to have an independent audit made of its books, records, and methods of operation by a certified public accountant or other qualified person or firm approved by the Commissioner, whenever it appears to the Commissioner that (i) the system of internal controls pertaining to the credit union is not adequate, (ii) the credit union is engaging in unsafe or unsound practices, or (iii) the financial condition of the credit union makes such an audit necessary.

1976, c. 658, § 6.1-213.1; 1990, c. 373, § 6.1-225.39; 2010, c. 794.

§ 6.2-1357. Qualifications of officials.

Every officer, director, and committee member shall be a member of the credit union.

Code 1950, § 6-213; 1956, c. 90; 1966, c. 584, § 6.1-204; 1968, c. 560; 1990, c. 373, § 6.1-225.40; 2010, c. 794.