CHAPTER 8. CREDIT UNIONS

§641. Organization; act of incorporation

A.(1) A credit union is a cooperative, nonprofit association, incorporated under the provisions of this Chapter for the purposes of encouraging thrift among its members, creating a source of credit at a fair and reasonable rate of interest, and providing an opportunity for its members to use and control their own money on a democratic basis in order to improve their economic and social condition.

(2) Any seven persons who are residents of Louisiana eligible under R.S. 6:645 to become members of the same credit union may apply to the commissioner for permission to organize a credit union by submitting a signed act of incorporation and proposed bylaws in which they shall bind themselves to comply with all the requirements thereof and with all laws and regulations applicable to credit unions. The original act of incorporation shall be filed of record in the mortgage office in the parish in which the credit union is organized. The filing fee shall be two dollars.

B. The act of incorporation shall state the following:

(1) The name of the proposed credit union (which shall include the words "credit union") and the municipality in which its business office is to be located, but not the word "incorporated".

(2) The names and addresses of the subscribers to the certificate and the number of shares subscribed by each.

(3) A statement that incorporation is desired under this Chapter.

(4) The following may be provided for in the act of incorporation or in the bylaws approved by the commissioner:

(a) The initial par value of shares and the number and par value of shares, the minimum number and the maximum number.

(b) The date of the annual meeting, which may be in any month of the year; the manner of notification of meetings and conducting the same; the number of members constituting a quorum; and regulations as to voting.

(c) The number of directors, which shall be not less than five, all of whom must be members; the names of the first board of directors, their powers and duties; and the duties of officers, elected by the board of directors.

(d) The qualifications for membership, including entrance fee, if any.

(e) The number of members of the credit committee and of the supervisory committee, which shall not be less than three each, and their respective powers and duties.

(f) The conditions under which shares may be issued, transferred, and withdrawn; loans made and repaid; and the funds otherwise invested. The determination of these matters may be vested in the board of directors except as otherwise herein provided.

(g) The credit union shall have the power to borrow and to determine the method of receipting for money, the manner of accumulating a reserve fund and determining a dividend, and such other matters consistent with the provisions of this Chapter as are required to perfect the organization and make possible the operation of the credit union. The determination of these matters may be left to the board of directors.

C. Two certified copies of the act of incorporation shall be filed with the commissioner of financial institutions, together with two certified copies of the bylaws, and a certificate showing recordation of the act of incorporation in the mortgage office.

D. The commissioner shall approve the act of incorporation and bylaws if in conformity with this Chapter and if satisfied that the proposed field of operation is favorable to the success of the credit union and that the standing of the proposed incorporators is such as to give assurance that its affairs will be properly administered, and on the condition that the proposed credit union obtain and maintain insurance of the member accounts or share accounts as provided in R.S. 6:644(8). The commissioner shall thereupon issue to the proposed incorporators a certificate of approval, annexed to the duplicate of the certified copy of the act of incorporation and bylaws. Thereupon, the incorporators shall become and constitute a credit union.

E. Credit unions organized under this Chapter shall be required to obtain and maintain primary insurance of its member accounts or share accounts. This requirement may be satisfied by insurance obtained through the National Credit Union Administration or other federal agency. This requirement may also be satisfied by insurance obtained through a state agency or a state share insurance corporation of any state established for the purpose of insuring the member accounts or share accounts in credit unions, with prior approval of the commissioner.

F. A corporate or central credit union whose membership other than incorporators is limited to other credit unions and credit union organizations shall not be subject to the limitations of the provisions of R.S. 6:644(3)(c).

Amended by Acts 1954, No. 530, §1; Acts 1956, No. 311, §1; Acts 1972, No. 160, §1; Acts 1977, No. 165, §1; Acts 1981, No. 166, §1; Acts 1982, No. 436, §1; Acts 1983, No. 351, §1; Acts 1984, No. 581, §1; Acts 2001, No. 887, §1, eff. June 26, 2001.