6-501
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6-501. Definitions A. In this chapter, unless the context otherwise requires: 1. "Branch office" means a place of business of a credit union, other than a principal office, at which deposits are received and checks are paid, but does not include premises used for computer operations, record keeping, accounting, storage, maintenance or other administrative or service functions. 2. "Capital" means share accounts, reserves and undivided earnings. 3. "Corporate credit union" means a credit union whose field of membership consists of other credit unions and organizations or associations owned by or composed of credit unions and corporations or associations which primarily serve credit unions. 4. "Credit union" means a cooperative nonprofit association which is incorporated under this chapter for the purposes of encouraging thrift among its members and creating a source of credit and other financial services at fair and reasonable cost. 5. "Deposit account" means a balance other than a share account held by a credit union including balances designated as special investment accounts, deposits, certificates of deposit, certificates of indebtedness, demand deposit accounts or other similar names. 6. "Fixed asset" means land, buildings and major equipment used by a credit union in the provision of services. 7. "Governmental unit" means a board, agency, department, authority, instrumentality or other unit or organization of the federal, state, county, municipal or other level of government. 8. "Immediate family" means persons related by blood or marriage and includes foster and adopted children. 9. "Insolvent" means that the value of a credit union's assets is less than its liabilities. 10. "Insuring organization" means the national credit union administration or successor organization or any other equivalent insurer approved by the superintendent. 11. "Membership share" means a balance held by a credit union and established by a member according to the standards prescribed by the credit union. 12. "Organization" means any corporation, association, partnership, society, firm, syndicate, trust or other legal entity. 13. "Reserves" means allocations of retained income and includes regular and special reserves and any allowances for loan losses and investment losses. 14. "Risk assets" includes all assets of the credit union except the following: (a) Cash on hand. (b) Deposits or shares in federally or state insured banks, savings and loan associations and credit unions which have a remaining maturity of five years or less or if the maturity is greater than five years, the asset is being carried on the credit union's records at the lower of cost or market or is being marked to market value monthly. (c) Assets which have a remaining maturity of five years or less and are insured by, fully guaranteed as to principal and interest by or due from the United States government, its agencies, the federal national mortgage association, the federal home loan mortgage corporation or the government national mortgage association including collateralized mortgage obligations which are comprised of government guaranteed mortgage loans or if the maturity is greater than five years, the asset is being carried on the credit union's records at the lower of cost or market or is being marked to market value monthly. (d) Loans to other credit unions which have a remaining maturity of five years or less or if the maturity is greater than five years, the asset is being carried on the credit union's records at the lower of cost or market or is being marked to market value monthly. (e) Student loans insured under the provisions of title IV, part B of the higher education act of 1965 (20 United States Code section 1071, et seq.) or similar state insurance programs which have a remaining maturity of five years or less or if the maturity is greater than five years, the asset is being carried on the credit union's records at the lower of cost or market or is being marked to market value monthly. (f) Loans which have a remaining maturity of five years or less and are fully insured or guaranteed by the federal or state government or an agency of either or if the maturity is greater than five years, the asset is being carried on the credit union's records at the lower of cost or market or is being marked to market value monthly. (g) Shares or deposits in a central or corporate credit union which have a remaining maturity of five years or less or if the maturity is greater than five years, the asset is being carried on the credit union's records at the lower of cost or market or is being marked to market value monthly. (h) Common trust investments, including mutual funds, which deal exclusively in investments authorized by the federal credit union act and are either carried at the lower cost or market or are marked to the market value monthly. (i) Prepaid expenses. (j) Accrued interest on nonrisk investments. (k) Loans fully secured by a pledge of shares in the lending federal credit union equal to and maintained to at least the amount of the loan outstanding. (l) Loans that are purchased from liquidating credit unions and guaranteed by the national credit union administration. (m) National credit union share insurance fund guaranty accounts established with the authorization of the national credit union administration under the authority of section 208(a)(1) of the federal credit union act. (n) Investments in shares of the national credit union administration central liquidity facility. (o) Fixed assets as defined in section 701.36(b) of the federal credit union act. (p) Deposits in the national credit union share insurance fund representing a federally insured credit union's capitalization account balance of one per cent of insured shares. 15. "Share account" means a balance held by a credit union and established by a member according to this chapter, including balances designated as shares, share certificates, share draft accounts and membership shares. Ownership of a share account confers membership and voting rights and represents an interest in the capital of the credit union. B. For the purposes of subsection A, paragraph 14, subdivision (g), a "central or corporate credit union" means a credit union whose membership primarily consists of either: 1. Other credit unions organized under state or federal law. 2. Officials, committee members and employees of any credit union organized under state or federal law. 3. Any combination of the categories described in paragraphs 1 and 2 of this subsection. |