§ 6-706. Service organization

   (a) Authorized; filings and submission of information; approval determination. --

   (1) With the prior approval of the Commissioner, as required under subsection (b) of this section, a credit union may organize a credit union service organization.

   (2) A credit union that proposes to organize a credit union service organization shall:

      (i) File with the Commissioner a notice of intention to organize a credit union service organization; and

      (ii) Submit to the Commissioner any information the Commissioner requires in order to evaluate the proposed credit union service organization.

   (3) In deciding whether to approve the organization of a credit union service organization, the Commissioner shall consider whether:

      (i) The organization of the credit union service organization will promote the convenience of the members of the credit union;

      (ii) The credit union has sufficient net worth to support the credit union service organization; and

      (iii) The credit union generally is operating in compliance with the provisions of this title.

   (4) Unless the Commissioner notifies the credit union that a different time period is necessary, within 60 days of receipt of the notice specified in paragraph (2) of this subsection, the Commissioner shall notify the credit union of the determination on the approval of the organization of a credit union service organization.

(b) Loans to service organization. --

   (1) Subject to the provisions of this subsection, a credit union may invest in and make loans to a credit union service organization.

   (2) If an investment or loan by a credit union to a credit union service organization causes the aggregate of the credit union's investments or loans to exceed 2% of the credit union's total assets, the credit union shall:

      (i) Notify the Commissioner as provided in paragraph (3) of this subsection; and

      (ii) Receive the prior approval of the Commissioner for any investment in or loan to the credit union service organization that exceeds the limit imposed under this paragraph.

   (3) A credit union that proposes to make any investment in or loan to the credit union service organization that exceeds the limit under paragraph (2) of this subsection shall:

      (i) File with the Commissioner a notice of intention to exceed the limit; and

      (ii) Submit to the Commissioner any information the Commissioner requires in order to evaluate the proposed intention to exceed the limit.

   (4) In deciding whether to approve the investment or loan, the Commissioner shall consider whether:

      (i) The investment or loan will promote the convenience of the members of the credit union;

      (ii) The credit union has sufficient net worth to support the investment or loan; and

      (iii) The credit union generally is operating in compliance with the provisions of this title.

   (5) Unless the Commissioner notifies the credit union that a different time period is necessary, within 60 days of receipt of the notice specified in paragraph (2) of this subsection, the Commissioner shall notify the credit union of the determination on the approval of the investment or loan.

(c) Access and review by Commissioner. -- As deemed necessary by the Commissioner, the Commissioner shall have complete:

   (1) Access to the books and records of a credit union service organization; and

   (2) Authority to review the internal controls of a credit union service organization.

(d) Multiple clients. -- A credit union service organization may serve on a contractual basis more than one credit union and its members.

HISTORY: 2001, ch. 147, § 1; ch. 148, § 1.