(a) Every credit union may issue shares (1) to any member qualified pursuant to the credit union’s bylaws; (2) to an officer, employee, or agent of nonmember units of federal, Indian tribal, state, or local governments, and political subdivisions thereof when acting in his or her official capacity; and (3) in coownership to a member and any person designated by the member. Coownership, as used herein, includes, but is not limited to, joint tenancy, tenancy in common, or community property forms of ownership. No membership privilege, including voting and obtaining a loan, may be made available to any nonmember as a result of ownership of shares solely as coowner of shares with a member, and any certificate or other evidence of shares which may be issued, shall contain the words “No transfer of voting rights or other membership privilege is permitted by virtue of transfer of shares.” Shares may be transferred to a public agency lawfully entitled to receive the shares when designated by a member as assignee of an account pledged as a surety deposit to the public agency by the member.

(b) A credit union that has a low-income designation pursuant to Section 701.34 of the regulations of the National Credit Union Administration (12 C.F.R. Sec. 701.34) may issue shares to nonmembers. Except with the written approval of the commissioner, the total number of shares issued by the credit union to nonmembers pursuant to this subdivision shall not exceed 20 percent of the unimpaired capital and surplus of the credit union.

(Amended by Stats. 1998, Ch. 539, Sec. 32.5. Effective January 1, 1999.)