Effective 28 Aug 2011

370.157. Director may remove officers, procedure. — 1. Whenever it shall appear to the director, from any examination made by him or her or her or his examiners, that any director, officer, or any other person participating in the conduct of the affairs of a credit union subject to this chapter has committed any violation of law or regulation or of a cease and desist order, or has violated any condition imposed in writing by the director or any written agreement between such credit union and the director, or has engaged or participated in any unsafe or unsound practice in connection with the credit union, or has committed or engaged in any act, omission, or practice which constitutes a breach of his or her fiduciary duty to the credit union, and the director determines that the credit union has suffered or will probably suffer financial loss or other damage or that the interests of its members could be prejudiced by reason of such violation or practice or breach of fiduciary duty, or that the director or officer or other person has received financial gain by reason of such violation or practice or breach of fiduciary duty, and such violation or practice or breach of fiduciary duty is one involving personal dishonesty on the part of such director, officer or other person, or one which demonstrates a willful or continuing disregard for the safety or soundness of the credit union, the director may serve upon such director, officer, or other person a written notice of his or her intention to remove such person from office.

2. When it shall appear to the director from any examination made by him or her or his or her examiners that any director, officer, or any other person participating in the conduct of the affairs of a credit union subject to this chapter, by conduct or practice with respect to another such credit union or any business institution which resulted in financial loss or other damage, has evidenced either his or her personal dishonesty or a willful or continuing disregard for its safety and soundness and, in addition, has evidenced his or her unfitness to continue as a director or officer and whenever it shall appear to the director that any other person participating in the conduct of the affairs of a credit union subject to this chapter, by conduct or practice with respect to such credit union or other corporation or other business institution which resulted in financial loss or other damage, has evidenced either his or her personal dishonesty or willful or continuing disregard for its safety and soundness and, in addition, has evidenced his or her unfitness to participate in the conduct of the affairs of such credit union, the director may serve upon such director, officer, or other person a written notice of intention to remove him or her from office or to prohibit his or her further participation in any manner in the conduct of the affairs of this credit union or from any other credit union supervised by the director.

3. Whenever it shall appear to the director to be necessary for the protection of any credit union or its members, he or she may, by written notice to such effect served upon any director, officer, or other person referred to in subsection 1 or 2 of this section, suspend him or her from office or prohibit him or her from further participation in any manner in the conduct of the affairs of the credit union. Such suspension or prohibition shall become effective upon service of such notice and shall remain in effect pending the completion of the administrative proceedings under the notice served under subsection 1 or 2 of this section and until such time as the director shall dismiss the charges specified in such notice or, if an order of removal or prohibition is issued against the director or officer or other person, until the effective date of any such order. Copies of any such notice shall also be served upon the credit union of which he or she is a director or officer or in the conduct of whose affairs he or she has participated.

4. Except as provided in subsection 5 of this section, any person who, pursuant to an order issued under this section, has been removed or suspended from office in a credit union or prohibited from participating in the conduct of the affairs of a credit union may not, while such order is in effect, continue or commence to hold any office in, or participate in any manner in, the conduct of the affairs of any other credit union subject to the provisions of this chapter.

5. If, on or after the date an order is issued under this section which removes or suspends from office any person or prohibits such person from participating in the conduct of the affairs of a credit union, such party receives the written consent of the director, subsection 4 of this section shall, to the extent of such consent, cease to apply to such person with respect to the credit union described in the written consent and the director shall publicly disclose such consent. Any violation of subsection 4 of this section by any person who is subject to an order described in subsection 4 of this section shall be treated as a violation of the order.

­­--------

(L. 1967 p. 509, A.L. 2011 S.B. 306)