Connecticut General Statutes 36a-461a – Credit union service organizations
(a) With the approval of the commissioner and in accordance with subsection (d) of section 36a-459a, a Connecticut credit union may establish a Connecticut credit union service organization by itself or jointly with one or more other Connecticut credit unions, federal credit unions, out-of-state credit unions or other federally-insured depository institutions within or outside of this state. The establishing Connecticut credit union shall file with the commissioner an application, which shall include a description of the credit union service organization services to be engaged in by the Connecticut credit union service organization, an explanation of how the proposed services are related to credit union services, and any other information that the commissioner may require. Such credit union service organization shall be organized as a corporation, limited liability company or limited partnership, provided the establishing Connecticut credit union obtains and files together with its application a written legal opinion that any such limited liability company or limited partnership is established in a manner that will limit potential exposure of such Connecticut credit union to no more than the amount of funds invested in or lent to the Connecticut credit union service organization by such Connecticut credit union.
Terms Used In Connecticut General Statutes 36a-461a
- another: may extend and be applied to communities, companies, corporations, public or private, limited liability companies, societies and associations. See Connecticut General Statutes 1-1
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Commissioner: means the Banking Commissioner and, with respect to any function of the commissioner, includes any person authorized or designated by the commissioner to carry out that function. See Connecticut General Statutes 36a-2
- Company: means any corporation, joint stock company, trust, association, partnership, limited partnership, unincorporated organization, limited liability company or similar organization, but does not include (A) any corporation the majority of the shares of which are owned by the United States or by any state, or (B) any trust which by its terms shall terminate within twenty-five years or not later than twenty-one years and ten months after the death of beneficiaries living on the effective date of the trust. See Connecticut General Statutes 36a-2
- Connecticut credit union: means a cooperative, nonprofit financial institution that (A) is organized under chapter 667 and the membership of which is limited as provided in section 36a-438a, (B) operates for the benefit and general welfare of its members with the earnings, benefits or services offered being distributed to or retained for its members, and (C) is governed by a volunteer board of directors elected by and from its membership. See Connecticut General Statutes 36a-2
- Connecticut credit union service organization: means a credit union service organization that is (A) incorporated under the laws of this state, located in this state and established by at least one Connecticut credit union, or (B) wholly owned by a credit union that converted into a Connecticut credit union pursuant to section 36a-469b. See Connecticut General Statutes 36a-2
- Control: has the meaning given to that term in 12 USC Section 1841(a), as amended from time to time. See Connecticut General Statutes 36a-2
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Credit union service organization: means an entity organized under state or federal law to provide credit union service organization services primarily to its members, to Connecticut credit unions, federal credit unions and out-of-state credit unions other than its members, and to members of any such other credit unions. See Connecticut General Statutes 36a-2
- Financial institution: means any Connecticut bank, Connecticut credit union, or other person whose activities in this state are subject to the supervision of the commissioner, but does not include a person whose activities are subject to the supervision of the commissioner solely pursuant to chapter 672a, 672b or 672c or any combination thereof. See Connecticut General Statutes 36a-2
- Loan: includes any line of credit or other extension of credit. See Connecticut General Statutes 36a-2
- Out-of-state: includes any state other than Connecticut and any foreign country. See Connecticut General Statutes 36a-2
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- State: means any state of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the trust territory of the Pacific Islands, the Virgin Islands and the Northern Mariana Islands. See Connecticut General Statutes 36a-2
(b) A Connecticut credit union service organization shall (1) account for all transactions in accordance with generally accepted accounting principles, (2) prepare quarterly financial statements and obtain an annual opinion audit by a licensed certified public accountant on its financial statements in accordance with generally accepted auditing standards, (3) preserve all of its books and records in accordance with regulations applicable to Connecticut credit unions adopted by the commissioner pursuant to chapter 54, (4) provide the commissioner with complete access to its books, records and internal controls for review, evaluation and examination, and (5) pay the actual cost of any such review, evaluation or examination conducted by the commissioner.
(c) A Connecticut credit union service organization may expand its credit union service organization services by filing with the commissioner prior written notice of its intention to engage in such expanded services, including a description of the proposed expanded services, an explanation of how the proposed expansion is related to credit union services, and any other information that the commissioner may require. The Connecticut credit union service organization may expand its services unless the commissioner disapproves such expansion not later than thirty business days after the notice is filed.
(d) A Connecticut credit union service organization shall not acquire control, either directly or indirectly, of another depository financial institution, nor invest in shares, stocks or obligations of an insurance company, trade association, liquidity facility, or similar organization, corporation or association.
(e) A Connecticut credit union service organization shall be subject to the conservatorship and receivership provisions of sections 36a-215 to 36a-239, inclusive.
(f) A Connecticut credit union may invest its funds in or lend to an existing credit union service organization in accordance with subsection (d) of section 36a-459a.
(g) (1) Prior to investing in or lending to a credit union service organization, a Connecticut credit union shall obtain (A) a written agreement that the credit union service organization will: (i) Account for all transactions in accordance with generally accepted accounting principles, (ii) prepare quarterly financial statements and obtain an annual opinion audit by a licensed certified public accountant on its financial statements in accordance with generally accepted auditing standards, (iii) provide the commissioner with complete access to all books and records of the credit union service organization and with the ability to review credit union service organization internal controls, as the commissioner deems necessary, and (iv) pay the actual cost of any examination conducted by the commissioner; and (B) a written legal opinion that the credit union service organization is established as a corporation, limited partnership or limited liability company and the potential exposure of the Connecticut credit union is limited to no more than the loss of funds invested in or lent to the credit union service organization. In order for a Connecticut credit union to maintain its investment in or loan to a credit union service organization that plans to change its form of organization, the Connecticut credit union shall obtain a written legal opinion that the credit union service organization will continue in such form that will limit potential exposure to the Connecticut credit union to no more than the loss of funds invested in or lent to the credit union service organization.
(2) If the commissioner determines that a Connecticut credit union’s investments in or loans to any credit union service organization exceed the limitations of this section or subsection (d) of section 36a-459a, or are otherwise not prudent for the Connecticut credit union to maintain, the commissioner may require the Connecticut credit union to divest such loans or investments.
(h) In connection with providing credit union service organization services, a Connecticut credit union service organization may invest in service providers. Any such investment shall be limited to the amount required by the service provider to obtain its services.
(i) A Connecticut credit union may, in order to obtain credit union service organization services or to provide credit union service organization services to its members, or to enable its members to conduct transactions through a credit union service organization, whether or not it establishes, invests its funds in or lends to a credit union service organization pursuant to subsection (a) or (f) of this section, enter into agreements with and pay appropriate fees and service charges to a credit union service organization.
(j) As frequently as the commissioner deems appropriate or necessary, the commissioner may conduct an examination of the records and books of a Connecticut credit union service organization or a credit union service organization in which a Connecticut credit union has invested or to which it has lent funds.
(k) Each Connecticut credit union service organization and each of its directors, officers, managers, general partners, employees and authorized agents who have charge or possession of the funds, securities or other assets of such credit union service organization shall be bonded by a surety company authorized to do business in this state. Such bond shall be in favor of the Connecticut credit union service organization and in such amount as is approved by the board of directors, managers or general partners of the credit union service organization, which amount the commissioner may require to be increased for reasons of safety and soundness. A copy of each such bond and any renewal thereof or premium receipt therefor shall be promptly filed with the commissioner by the Connecticut credit union service organization.
(l) A Connecticut credit union that proposes to close a Connecticut credit union service organization shall submit to the commissioner a notice of the proposed closing not later than thirty days prior to the date proposed for such closing. The notice shall include a detailed statement of the reasons for the decision to close the credit union service organization.