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As Introduced
136th
General Assembly
Regular
Session
H. B. No. 612
2025-2026
Representative Pizzulli
To
amend section 1761.10 of the Revised Code
regarding
credit union share guaranty corporations.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section
1.
That
section 1761.10 of the Revised Code be amended to read as follows:
Sec.
1761.10.
(A)(1)
A credit union share guaranty corporation shall establish and
maintain a guarantee fund. The fund shall be maintained at a normal
operating level as defined by the board of directors of the
corporation and approved by the superintendent of insurance, except
that the normal operating level shall at all times be no less than
one per cent of the aggregate share capital of participating credit
unions, irrespective of how denominated. The fund of the corporation
shall be comprised of the following:
(a)
The account for each participating credit union;
(b)
Retained and undivided earnings;
(c)
Any reserves required by statute or order of the superintendent of
credit unions;
(d)
Borrowings made in accordance with section 3901.72 of the Revised
Code.
(2)(a)
Each participating credit union shall contribute to and maintain with
the corporation a capital contribution to be credited to its account,
in an amount equal to at least one per cent of its aggregate share
capital as is established as the normal operating level of the fund
by the board of directors pursuant to division (A)(1) of this section
and approved by the superintendent of insurance. Each participating
credit union's account shall be adjusted annually to reflect changes
in the participating credit union's aggregate share capital in
accordance with procedures adopted by the board of directors and may
be adjusted more frequently if an increase in the aggregate share
capital or a change in the financial condition of the participating
credit union warrants such adjustment. Those credit unions
participating in excess coverage shall pay a premium as prescribed by
the board of directors of the corporation and as filed and approved
under Chapter 3937. of the Revised Code.
(b)
The approval of the superintendent of insurance concerning the normal
operating level of the guarantee fund expires upon written
determination by the superintendent of insurance that there is cause
for additions to the guarantee fund. This determination is not
subject to any hearing requirement under Chapter 119. of the Revised
Code, provided a credit union guaranty corporation may request a
supervisory conference under section 1761.19 of the Revised Code.
(3)
If, at the close of a fiscal year, the guarantee fund exceeds the
normal operating level determined by the board of directors of a
credit union share guaranty corporation, the board of directors may
make a distribution of the excess to participating credit unions. Any
distribution shall be made to each participating credit union in the
proportion that each participating credit union's account bears to
the total aggregate participating credit union accounts of the
corporation. No determination by the board of directors is effective
until approved by the superintendent of insurance. No distribution
shall be made, nor shall it confer any rights, until approved by the
superintendent of insurance.
(4)
The amount of the account of each participating credit union shall be
carried on the books of the individual participant as a deposit with
the corporation.
(5)
Notwithstanding any other provision of this chapter, the corporation
shall require the participating credit unions to make capital
contributions to maintain the normal operating level set by division
(A)(1) of this section during any calendar year in which the fund has
been reduced below the minimum operating level as a result of payment
of any deficiencies in credit union share accounts.
(B)(1)
The corporation may annually or more frequently levy and collect
additions to the capital contribution as the board of directors of
the corporation considers appropriate, if the superintendent of
credit unions and the superintendent of insurance approve of such
additions. Whenever the superintendent of credit unions or the
superintendent of insurance considers it necessary for the
maintenance of the normal operating level of the fund, the
superintendent shall order the corporation to levy and collect
additions to the capital contributions. Such order shall specify the
amount of the addition and the reasons upon which the order is based.
(2)
The corporation shall send a written notice of capital contributions
required pursuant to division (B)(1) of this section to each
participating credit union within ten days after the levy of any
capital contributions. Capital contributions shall be paid to the
corporation by each participating credit union not later than thirty
days following mailing of written notice of any required capital
contribution.
(C)(1)
In the event of potential impairment of the fund, a special
assessment of the fund may be levied by the corporation
on participating credit unions the corporation insures for primary
coverage,
with the approval of the superintendent of credit unions or the
superintendent of insurance. Impairment for this purpose is deemed to
exist when the corporation's liabilities and share capital exceed its
assets. Whenever the superintendent of credit unions or the
superintendent of insurance considers it necessary to avoid an
impairment of the fund, the superintendent shall order the
corporation to levy a special assessment. Such order shall specify
the amount of the assessment and the reasons upon which the order is
based.
(2)
The corporation shall send a written notice of the special assessment
required pursuant to division (C)(1) of this section to each
participating credit union within ten days after the levy thereof.
Special assessments shall be paid to the corporation by each
participating credit union not later than thirty days following
mailing of written notice of any special assessment unless for good
cause shown the time period is extended.
(D)(1)
The corporation may annually, or more frequently, levy on and collect
special premium assessments from participating credit unions
the corporation insures for primary coverage
as the board of directors of the corporation considers necessary when
the guarantee fund has experienced, or is expected to experience, a
net loss for any one year, if the superintendent of credit unions and
the superintendent of insurance approve of the special premium
assessment.
(2)
The corporation shall send a written notice of the special premium
assessment levied under division (D)(1) of this section to each
participating credit union within thirty days after receipt of the
approval of the superintendent of credit unions and the
superintendent of insurance to charge the assessment. Special premium
assessments shall be paid to the corporation by each participating
credit union not later than thirty days after receipt of the notice
of the assessment.
(3)(a)
With the written approval of the superintendent of insurance, the
corporation may declare and pay a cash dividend to those
participating credit unions that are participating credit unions as
of the date of the declaration and that have paid special premium
assessments to the corporation. The amount of the dividend allocable
to a participating credit union shall be determined based on the
proportion of the special premium assessments paid by the credit
union as compared to the total of all special premium assessments
collected by the corporation.
(b)
The superintendent shall approve or disapprove a corporation's
request for approval to pay a cash dividend as provided in division
(D)(3)(a) of this section within thirty days after receiving the
corporation's request for approval.
(E)
A report of each capital contribution that may be required pursuant
to division (B) of this section shall be made to the superintendent
of credit unions and the superintendent of insurance within ninety
days of the special assessment levy. A report of each special
assessment or special premium assessment that is required pursuant to
division (C) or (D) of this section shall be made to the
superintendent of credit unions and the superintendent of insurance
within ten days after mailing the written notice thereof to
participating credit unions.
(F)(1)
In the event any participating credit union fails to pay an annual
capital contribution when due, the corporation shall report such
default in writing to the superintendent of credit unions and the
superintendent of insurance and the appropriate credit union
supervisory authority or the national credit union administration
within twenty-four hours of such default, and shall revoke after
thirty days' notice the participating credit union's participation in
the corporation, unless good cause is shown for the delay.
(2)
In the event any participating credit union fails to pay any
additional capital contribution, premium, fee, or assessment when
due, the corporation shall report such default in writing to the
superintendent of credit unions and the superintendent of insurance
and the appropriate credit union supervisory authority or the
national credit union administration within twenty-four hours of such
default, and shall revoke after thirty days' notice the participating
credit union's participation in the corporation, unless good cause is
shown for the delay.
(3)
The thirty-day notice of revocation required under divisions (F)(1)
and (2) of this section does not apply to the revocation of excess
coverage.
(G)
Any participating credit union that is voluntarily liquidated, any
participating credit union that withdraws from participation in the
corporation and obtains a different form of share guaranty or
insurance pursuant to section 1733.041 of the Revised Code or similar
state statute, or any participating credit union that merges with
another credit union that becomes the surviving credit union whose
shares are guaranteed or insured by a different form of guaranty or
insurance may be refunded in an amount equal to the balance of its
capital contribution account. Such reimbursement of a participating
credit union's capital contribution account balance shall be paid
only if and when the guarantee fund exceeds its normal operating
level as calculated without the account of the withdrawing credit
union.
(H)
In the event of a merger of two or more participating credit unions
where the surviving credit union is to be insured by the corporation,
the funds in the capital contribution account of each credit union
shall be transferred to the account of the surviving credit union.
(I)
If
Subject
to division (J) of this section, if
a
credit union share guaranty corporation is dissolved, the net assets
after settling any recorded, contingent, and contractual liabilities,
and all costs of dissolution shall be distributed to the
participating credit unions in accordance with their share balances,
less any outstanding debts owed to the corporation.
(J)
Notwithstanding any contrary provision of the Revised Code, if a
credit union share guaranty corporation is a nonprofit organization
recognized under section 501(c)(6) of the "Internal Revenue Code
of 1986," 26 U.S.C. 1, et seq., and the dissolution of the
corporation is caused by a reason outside the corporation's control,
after settling any recorded, contingent, and contractual liabilities,
and all costs of dissolution, all of the following apply:
(1)
The corporation shall return the capital contributions to the
participating credit unions that are members of the corporation on
the date the corporation files the certificate of dissolution with
the secretary of state.
(2)
If the corporation has remaining assets after returning the capital
contributions as required under division (J)(1) of this section,
transfer the remaining assets to any surviving wholly owned
subsidiary of the corporation. If no wholly owned subsidiary exists
or survives, the corporation shall distribute the remaining assets to
the participating credit unions in accordance with the participating
credit unions' share balances.
(3)
The participating credit unions shall be recognized as shareholders
of the surviving wholly owned subsidiary, if applicable, in
accordance with the participating credit unions' share balances, less
any outstanding debts owed to the corporation.
Section
2.
That
existing section 1761.10 of the Revised Code is hereby repealed.