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(a) Certificate of Authority to Conduct Credit Union Business. No proposed credit union may conduct the business of a credit union unless a certificate of authority to conduct credit union business has been issued by the department and the certificate is prominently and publicly displayed in the principal office.
(b) Order of Approval. The incorporators of a proposed credit union must submit to the department the following documents, together with supporting materials, which must be reviewed and approved or disapproved in the following order:
(1) notice of intent to incorporate a credit union;
(2) application for a certificate of incorporation;
(3) request for approval of solicitation materials under 3 AAC 03.230;
(4) application for certificate of authority to conduct credit union business.
(c) Notice of Intent. The incorporators of a proposed credit union shall submit to the department a written notice of intent to organize a credit union which
(1) is signed originally by at least seven of the incorporators;
(2) contains the name to be reserved for the proposed credit union;
(3) contains the field of membership of the proposed credit union;
(4) indicates the city or otherwise specifies the proposed location of the proposed credit union;
(5) indicates the address, occupation, and amount of shares subscribed by each incorporator; and
(6) indicates the individual elected as president by the incorporators who will accept notice from the department on behalf of all incorporators.
(d) Application For a Certificate of Incorporation. The following information and fee must be submitted to the department in support of an application for a certificate of incorporation:
(1) a completed NCUA share insurance application which may be obtained directly from NCUA;
(2) a copy of the proposed articles of incorporation of the credit union executed in triplicate with all copies bearing original signatures;
(3) a copy of the proposed bylaws;
(4) an economic analysis to support the need and feasibility of the proposed credit union including but not limited to the number of potential members, the dispersion of the group, evidence of group interest, leadership, willingness of persons to serve as officers of the proposed credit union and otherwise participate in the affairs of the proposed credit union, economic factors or conditions present in the area, and the availability of other credit union services;
(5) any additional information requested by the department; and
(6) a check or money order for $1,000 made payable to the State of Alaska as a partial prepayment of investigation expenses incurred by the department in accordance with AS 06.01.010 .
(e) Expense Fund. An expense fund over which the department has withdrawal control must be established by the incorporators subject to approval by the department. All organizational expenses incurred in establishing the proposed credit union must be paid out of that expense fund. The expense fund must be established with the minimum balance required by the department before any withdrawals will be authorized. All payments by incorporators must be deposited to this account. Individuals making deposits to this account must absorb any expenses pro rata if the proposed credit union does not become operational.
(f) Escrow Accounts. An escrow account over which the department has control must be established by the incorporators subject to approval by the department. All share subscriptions are to be deposited to this account prior to the receipt of the certificate of authority to conduct credit union business.
(g) Preliminary Investigation Report. It is desirable, although not mandatory, that a third party acceptable to the department and knowledgeable in credit union operations complete the department's preliminary investigation report to assist in gathering data on the proposed credit union.
(h) Issuance of Certificate of Incorporation. If the department finds that (d), (e) and (f) of this section and all other requirements of the department have been complied with by the incorporators, a certificate of incorporation will be issued.
(i) Application For Certificate of Authority. A credit union must submit the following information to the department for its consideration in issuing a certificate of authority to conduct credit union business:
(1) evidence that insurance of accounts has been obtained from NCUA;
(2) evidence that the surety bond is in force, including the amount and type of any excess coverage provided;
(3) a statement of where the proposed credit union will conduct its business and, if space is leased, a fully executed copy of all lease documents, which must contain a bankruptcy clause;
(4) a statement of whether or not the proposed credit union plans to finance any improvements to the property, and, if it intends to lease, whether the proposed lessor will be a borrowing member of the proposed credit union;
(5) the amount of fire and liability insurance coverage to be carried for the proposed credit union's facilities and equipment, who will pay the premium, and, if it will be paid by the proposed credit union, the amount of the premium;
(6) an itemized list of the proposed credit union's investment in land, building, leasehold improvements, furniture, fixtures and equipment, and any other proposed amount (and the method of depreciation to be used) to be reflected on the books of the proposed credit union;
(7) an organization chart showing the line of authority to be used by the proposed credit union in providing its services; and
(8) additional information as requested by the department.
(j) Timetable. The credit union will have a maximum of six months from the date of issuance of its certificate of incorporation until it receives its certificate of authority to conduct credit union business unless an extension of time has been approved by the department.
(k) Corporate Credit Union. A corporate credit union may be incorporated under this chapter and will be subject to the requirements of this chapter which are consistent with this section.
(1) Purposes. The purposes of a corporate credit union are
(A) to accumulate and prudently manage the liquidity of its member credit unions through interlending and investment services;
(B) to act as an intermediary for credit union funds between members and other corporate credit unions;
(C) to obtain liquid funds from other credit union organizations, financial intermediaries, and other sources;
(D) to promote, in cooperation with other state, regional, and national corporate credit unions and credit union organizations or associations, the economic security, growth and development of member credit unions; and
(E) to perform other services of benefit to its members which may be authorized by the department.
(2) Voting Representatives. When becoming a member of the corporate credit union, the board of directors of each credit union or organization serving the interest of credit unions shall designate one person to be a voting representative in the corporate credit union. That voting representative is eligible to hold office in the corporate credit union as if the person were a member of the corporate credit union.
(A) Application to form a corporate credit union must be made in writing to the department and will be subject to the same application process as set out in this section and 3 AAC 03.230 to organize a credit union, except that the application must contain the names of at least 10 credit unions which have agreed to subscribe to shares in the corporate credit union at the time the application is made.
(B) The bylaws must provide for the selection of a board of directors of at least five members and must require credit unions applying for membership to subscribe to shares in a minimum amount as specified in the bylaws.
History: Eff. 1/21/81, Register 77
Authority: AS 06.45.010
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Last modified 7/05/2006