Credit unions.

Existing law, the California Credit Union Law, provides for the regulation and certification of credit unions by the Commissioner of Financial Institutions. Existing law regulates loans to officials of a credit union and defines an official as a director, officer, or member of the supervisory committee or the credit committee of a credit union. Existing law prohibits a credit union from entering into any obligation with an official of the credit union, directly or indirectly, not fully secured by shares or certificates for funds unless specified requirements are satisfied. Existing law makes it a crime for specified employees of a credit union to knowingly permit, or participate in, the creation of an obligation that is not in conformity with the requirements of the Credit Union Law, except as specified. This bill would revise these requirements in order for a credit union to enter into an obligation, as defined, with an official of the credit union, directly or indirectly. The bill would, among other things, in order for a credit union to be authorized to enter into these obligations with an official, prohibit the aggregate amount of obligations outstanding to all officials, except obligations fully secured by shares, from exceeding 20% of the aggregate dollar amount of all savings capital of the credit union and would require that any obligation which would cause the aggregate amount of obligations outstanding to the official to exceed $50,000, excluding any portion fully secured by shares, be approved by the credit committee or credit manager, and by the board of directors of the credit union. Because knowingly creating or participating in the creation of an obligation in violation of these provisions by an employee of a credit union would be a crime, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.