CHAPTER 75

An Act to amend and reenact §§ 6-220, 6-221, 6-227, 6-228 and 6-229, as
amended, of the Code of Virginia, all relating to credit unions; the
sections relating, respectively, to officers and directors, the credit
committee, reserve funds, dividends and supervision by the State
Corporation Commission.
[H 300]

Approved February 21, 1964

Be it enacted by the General Assembly of Virginia:

1. That §§ 6-220, 6-221, 6-227, 6-228 and 6-229, as amended, of the Code
of Virginia be amended and reenacted as follows:

§ 6-220. At their first meeting * following the annual meeting, the
board of directors of such credit union shall elect from their number a
president, vice-president, secretary and treasurer. The offices of secretary
and treasurer may, if the by-laws so provide, be held by one person; and
other officers may be elected in the discretion of the directors.

The board of directors shall have the general management of the
affairs, funds and records of the corporation, and shall meet as often as
may be necessary. Unless the by-laws shall specifically reserve all or any
of these duties to the members it shall be the special duty of the directors:
(1) To act upon all applications for membership and the expulsion of
members; (2) to fix the amount of the blanket surety bond which shall be
required of each * official, committee member or employee of the credit
union, the surety on the bond to be some solvent surety company licensed
to do business in Virginia and the amount thereof to be approved by the
Commission; (3) to determine from time to time the rate of interest which
shall be allowed on deposits and charged on loans; (4) to fix the maximum
number of shares which may be held by, and the maximum amount which
may be lent to, any one member; (5) to declare dividends; (6) to recom-
mend amendments to the by-laws; (7) to fill vacancies in the board of
directors or in the credit committee until the election and qualification of
successors; (8) to have charge of the investment of the funds of the cor-
poration: and (9) to perform such other duties as the members may from
time to time authorize.

No member of the board of directors shall receive any compensation
for his services as a member of such board. The members of the credit
or supervisory committee of any corporation established hereunder having
assets in excess of fifty thousand dollars may receive for their services,
as such members, such compensation as the board of directors may deter-
mine.

§ 6-221. The credit committee of such credit union shall approve
every loan or advance made by the corporation to members except that
the credit committee may appoint one or more loan officers, and delegate
to him or to them the power to approve loans up to the unsecured limit,
or in excess of such limit if such excess is fully secured by the pledging of
shares. Each loan officer shall furnish to the credit committee a record of
each loan approved or not approved by him by the next meeting of the
committee or, in any case, within seven days of the date of the filing of
the application therefor. All loans not approved by a loan officer shall be
acted upon by the credit committee. No individual shall have the authority
to disburse funds of the credit union for any loan which has been approved
by him in his capacity as a loan officer. No member of the credit commit-
tee may be appointed as a loan officer. Every application for a loan shall
be made in writing on a form prepared by the board of directors and shall
state the purpose for which the loan is desired and the security offered.
No loan shall be made unless it receives the unanimous approval of those
members of the credit committee who are present when it is considered,
which number shall constitute at least a majority of the members of the
committee, nor if any member of the committee shall disapprove thereof;
but the applicant for a loan may appeal from the decision of the credit
committee to the board of directors. The credit committee shall meet as
often as may be required. Due notice of each such meeting shall be given
to each member of the committee.

§ 6-227. All entrance fees, transfer fees and fines shall, after pay-
ment of the organization expenses, be added to the reserve fund of the
corporation. At the close of each * dividend period there shall be set apart
to the reserve fund ten per centum of the gross income of the corporation
which has accumulated during the * period, until the reserve fund is equal
to twenty per centum of the total assets, exclusive of the reserve fund.
Upon recommendation of the board of directors the members, at an annual
meeting, may increase the proportion of earnings to be set apart to the
reserve fund. Losses incurred in any form may be charged to the reserve
fund. Any sums recovered on items previously charged to it shall be cred-
ited to the reserve fund, except when the reserve equals twenty per centum
of the total assets exclusive of the reserve fund. The reserve fund, includ-
ing any excess from June twenty-ninth, nineteen hundred forty-eight, shall
belong to the corporation and shall be held to meet contingencies and shall
not be distributed to the members except on dissolution of the corporation.

§ 6-228. * Annually, semiannually or quarterly as the bylaws of
each credit union may provide and after provision for the required re-
serves, the board of directors may declare a dividend to be paid from the
remaining net earnings. Such dividends shall be paid on all paid up shares
outstanding at the end of the period for which the dividend is declared.
Shares which become fully paid up during such dividend period and are
outstanding at the close of the period shall be entitled to a proportional
part of such dividend. Dividend credit for a month may be accrued on
enone which are or become fully paid up during the first ten days of that
mont

§ 6-229. Corporations organized under the provisions of this chapter
shall be subject to such supervision and examination as the Commission
may, in its discretion, deem necessary. Every such corporation shall make
a report of condition to the Commission * at the close of bustness on the
thirty-first day of December of each year. 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 corpora-
tion which neglects or refuses to make any report called for shall be
subject to a fine, to be imposed by the Commission, of not more than ten
dollars for each day of such neglect, unless excused by the Commission
for good cause shown.