CHAPTER 90

AN ACT to amend and reenact §§ 6-207, 6-218, 6-214, 6-217, 6-218, 6-228,
6-224, 6-225, 6-226 and 6-229 of the Code of Virginia, relating to
credit unions.

(H 291]

Approved February 21, 1956

Be it enacted by the General Assembly of Virginia:

1. That §§ 6-207, 6-213, 6-214, 6-217, 6-218, 6-228, 6-224, 6-225, 6-226
and 6-229 of the Code of Virginia be amended and reenacted as follows:

§ 6207. Contents of by-laws.—The by-laws of every credit union
shall specify: . ; .

(1) The date of the annual meeting, which shall be in January,
February or March, of each calendar year, and the requirements as to
notice and manner of conduct of such meeting;

(2) The number of directors, which shall be not less than five, all
of whom must be shareholders and members of the corporation, the
powers and duties of the directors, * the maximum compensation and the
duties of all officers;

(3) The conditions and qualifications for membership, which shall
limit the membership to persons having a specified common bond of
interest, members of their families, associations of such persons, and em-
ployees of the credit union;

(4) The number of members of the credit committee and of the
supervisory committee, with their respective powers and duties;

(5) The conditions upon which shares may be issued, transferred
and withdrawn;

(6) The charges, if any, to be made for failure to meet obligations
punctually ;

(7) The conditions upon which deposits may be received and with-
drawn, and whether the corporation shall have the power to borrow;

(8) The manner in which the funds of the corporation may be in-
vested ;

(9) The conditions upon which loans may be made and repaid;

(10) The method of receipting for money paid in on account of
shares, deposits or loans;

(11) The manner in which the reserve fund shall be accumulated;

(12) The manner in which dividends shall be determined and paid

* Any by-law may be amended by the Commission by order entered
on its order book and certified to the credit union. Before entering any
such order the Commission shall notify the credit union of the proposed
amendment and afford it an opportunity to be heard thereon.

§ 6-213. Membership.——The membership of the corporation shall
consist of the incorporators and such eligible persons, societies, associa-
tions, partnership and corporations, * subject to approval by the Board,
who have subscribed for one or more shares and have paid for the same
in whole or in part, together with the entrance fee as provided in the
by-laws, and have complied with such other requirements as the certificate
of organization and by-laws may contain.

§ 6-214. Capital; par value of shares; rights in regard to shares.—
The capital of a credit union shall consist of the payments that have been
made to it by the several members thereof on shares. The par value of
the shares shall be five dollars per share and shall be paid for in money
only. Shares may be subscribed for and paid in such manner as the by-
laws shall prescribe, not inconsistent with the provisions of this chapter.
A credit union shall have a lien on the shares of any member and upon
any dividends payable thereon for, and to the extent of any loan made to
him and of any dues and fines payable by him. A credit union may, upon
the resignation or expulsion of a member, cancel the shares of such
member and apply the withdrawal value of such shares towards the
liquidation of such member’s indebtedness.

_ * Shares may be issued or transferred only to members of the credit
unton or to other credit unions. Shares that are not fully paid may not
be transferred. The fee for transferring one or more shares at one time
from one transferor to one transferee shall not exceed twenty-five cents.

§ 6-217. Expulsion and Withdrawal.—* A member may be expelled
by a two-thirds vote of the membership present at a special meeting called
to consider the matter, but only after a hearing. A member may withdraw
from a credit union* as hereafter provided, by filing a written notice of
his intention so to do.

__ All amounts paid in on shares of an expelled or withdrawing member,
with any dividends credited to his shares to the date of expulsion or
withdrawal, shall be paid to such member in the order of expulsion or
withdrawal and only as funds therefor become available, after deducting
any amounts due to the corporation by such member. All deposits of an
expelled or withdrawing member, with any interest accrued, shall be paid
to such member subject to sixty days’ notice and after deducting any
amounts due the corporation by such member. Such member when with-
drawing shares or deposits shall have no other or further right in such
credit union or to any of its benefits, but such expulsion or withdrawal
shall not operate to relieve such member from any remaining liability to
the corporation.

§ 6-218. Fiscal year and meetings; regulations as to voting.—The
fiscal year of every credit union shall end at the close of business on the
thirty-first day of December. The annual meeting of the corporation shall
be held * as provided in the by-laws of the corporation. Special meetings
may be held by order of the directors or of the supervisory committee, and
shall be held upon request in writing of ten per centum of the members.
Notice of all meetings of the corporation shall be given in the manner
prescribed in the by-laws. At all meetings of members a member shall
have but one vote, irrespective of the number of shares held. Except as
hereinafter provided, no shareholder may vote by proxy, but a society,
association, co-partnership or corporation, having membership in the
credit union, may be represented by one person authorized by such society,
association, co-partnership or corporation to so represent it; provided,
however, that at any meeting called for the purpose of amending the
charter or certificate of incorporation any shareholder may vote by proxy
for or against such amendment, but for no other purpose; and the affirma-
tive votes of two-thirds of the members of the credit union shall be neces-
sary and sufficient to approve the amendment irrespective of the number
of shares held by each. At any meeting the members may decide upon any
CH. 90] ACTS OF ASSEMBLY 99

question of interest to the corporation, and overrule the board of directors,
and by a three-fourths vote of those present and represented, provided
the notice of the meeting shall have specified the question to be considered,
may vote to amend the by-laws. .

§ 6-223. Deposits—A credit union may receive the savings and
deposits of its members, members of their families, associations of such
persons, and employees of the credit union, and other credit unions, in
such amounts and upon such terms as the board of directors may deter-
mine and the by-laws shall provide. * .

§ 6-224. Rates of interest.—A credit union may lend to its members
at reasonable rates of interest, or invest, as hereinafter provided, the funds
accumulated by it. The rates of interest shall not exceed one * per centum
per month computed on unpaid balances. ; _

§ 6-225. Investment of funds.—The capital, deposits, undivided
profits and reserve fund of the corporation may be invested in the follow-
ing ways, and in such ways only: .

(1) Lent to members of the corporation in accordance with the pro-
visions of this chapter; ;

(2) Deposited to the credit of the corporation in other credit unions
* or in State banks or trust companies incorporated under the laws of this
State, or in national banks operating in this State;

(3) Not more than ten per centum of the capita] stock and reserve
fund of a credit union may be invested in the stock of other credit unions;

(4) * Lent to other credit unions if provided—and under conditions
set forth in the by-laws;

(5) Invested in United States Government bonds, or in bonds of the
Sista ef Virginia, or any subdivisions thereof, including revenue bonds

eoj;

§ 6-226. Loans.—As provided in § 6-225 a credit union may loan to
its members for such purposes and upon such security and terms as the
by-laws shall provide and the credit committee shall approve; but security
must be taken for any loan (except to another credit union) in excess of *
siz hundred dollars. Endorsement of a note or assignment of shares in any
credit union shall be deemed security within the meaning of this section.

The supervisory committee shall appoint a substitute to act on the
credit committee in the place of any member in case such member makes
application to borrow money from a credit union or become surety for
any other member whose application for a loan is under consideration.

All officers and members of any committee in any way knowingly per-
mitting or participating in making a loan of funds of a credit union to a
non-member thereof shall be guilty of a misdemeanor. The credit union
shall have the right to recover the amount of such illegal loans from the
borrower or from any officer or member of a committee who knowingly
participated in the making thereof, or from all of them jointly.

A borrower may repay the whole or any part of his loan on any day
on which the office of the corporation is open for the transaction of
business.

§ 6-229. Supervision by Commission; report.—Corporations organ-
ized under the provisions of this chapter shall be subject to such super-
vision and examination as the Commission may, in its discretion, deem
necessary. Every such corporation shall make a report of condition to the
Commission on the dates of the second and last calls made on State banks.
These reports shall be * signed by * the president and the treasurer or
secretary, or by * a majority of the members of the supervisory committee,
and they shall make such other reports * as the Commission shall at any
time demand. Any such corporation which neglects or refuses to make any
report called for shall be subject to a fine, to be imposed by the Commis-
sion, of not more than ten dollars for each day of such neglect, unless
excused by the Commission for good cause shown.