Volume 47 · 327
Public Law 72–272
To provide for the incorporation of credit unions within the District of Columbia.
Approved June 23, 1932
Statutory text
AN ACT
To provide for the incorporation of credit unions within the District of Columbia.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
Short Title
Section 1.
This Act may be cited as the “District of Columbia Credit Unions Act.”
Definition
Sec. 2.
A credit union is hereby defined to be a cooperative society organized for the purpose of promoting thrift among its members and creating a source of credit for them for provident purposes.
Organization Certificate
Sec. 3.
Any seven or more persons, who are actual residents of, or do business or are employed within, the District of Columbia, and who desire to form a credit union, shall subscribe before some officer in the District competent to take the acknowledgment of deeds, an organization certificate which shall specifically state—
First.
The name of the corporation, which shall include the words “credit union” and “District of Columbia.”
Second.
The names and addresses of the subscribers to the certificate and the number of shares subscribed by each.
Third.
The par value of the shares of the credit union, which shall not exceed $10 each.
Fourth.
The proposed field of membership, specified in such detail as the Commissioners of the District of Columbia may require.
Fifth.
The term of the credit union’s existence, which may be perpetual.
Power of Commissioners of the District
Sec. 4.
The organization certificate shall be presented to the Commissioners
Examination and approval of certificate.
of the District of Columbia, who may, in their discretion, approve the certificate. The said commissioners are hereby authorized to refer any such proposed certificate to the Comptroller of the
Report of Comptroller of the Currency.
Currency, who shall, within a reasonable time, submit a report to the said commissioners with respect (1) to the conformity of the certificate to the provisions of this Act, (2) the general character and fitness of the subscribers, and (3) the advisability of establishing a credit union in the proposed field of membership.
Recording Certificate
Sec. 5.
The certificate, if approved by the Commissioners of the
Filing.
District of Columbia, shall be filed for record in the office of the recorder of deeds for the District of Columbia, and shall be recorded by him. At such time as the approved certificate is so filed, the
Subscribers incorporated.
subscribers and their successors shall thereupon become a body corporate and as such shall, subject to the limitations of section 8
Post, p. 328.
(relating to approval of by-laws), be vested with all the powers
Powers, liabilities, etc.
and charged with all the liabilities conferred and imposed by this Act upon corporations organized thereunder as credit unions: Provided
Proviso.
Fees.
Vol. 31, p. 1276, not to apply.
That the last paragraph of section 552 of the Code of Law for the District of Columbia shall have no application to credit unions.
Supervision by Comptroller of the Currency
Sec. 6.
The provisions of sections 713 and 714 of the Code of
Powers of, extended to credit unions.
Vol. 31, pp. 1302, 1303.
Law for the District of Columbia, as now or hereafter amended (relating to supervision by the Comptroller of the Currency of banking institutions in the District of Columbia), shall apply to credit unions, except that the Comptroller of the Currency may relieve credit unions from compliance with any such requirements to such extent and in such manner as he deems will not prejudice the proper conduct of the affairs of such credit unions: Provided, however,
Provisos.
Publication of reports.
Vol. 31, p. 1302, waived.
That the publication of reports named in section 713 shall not be required of credit unions having assets of less than $100,000 and fees incident to making the examinations specified in section 714
Examination fees.
shall not exceed a basic fee of $5 and 3 cents per $1,000 of assets per annum: Provided, however, That it shall be unlawful for any
Conducting business without license unlawful.
such credit union to transact business in the District of Columbia without procuring a license from the District of Columbia; and all such credit unions shall pay a license tax of $15 per annum to the
Annual tax.
District of Columbia. No license shall be granted for a period longer than one year: Provided, however, That the Commissioners
Suspension, etc., of license for cause.
of the District of Columbia may suspend or revoke a license upon proof of the bankruptcy or insolvency of any such credit union or upon conviction of a violation of any provision of this Act or of any law or regulation of the District of Columbia or of the United States.
Powers
Sec. 7.
A credit union shall have succession in its corporate name during its existence and shall have power—
First.
To make contracts.
Second.
To sue and be sued in its corporate name.
Third.
To adopt and use a common seal and alter the same at pleasure.
Fourth.
To purchase, hold, and dispose of property necessary to enable the corporation to carry on its operations.
Fifth.
To make loans to its members for provident purposes upon such terms and conditions as the by-laws provide and as the credit committee may approve at rates of interest not exceeding 1 per centum per month on unpaid balances, inclusive of all charges incident
Proviso.
Maximum loans to directors, etc.
to the making of the loan: Provided, That no loan to a director, officer, or member of a committee shall exceed the amount of his holdings in the company in shares nor shall any such director, officer,
Repayment.
or member indorse for borrowers. A borrower may prior to maturity repay his loan in whole or in part on any business day.
Sixth.
To receive of its members payment on shares.
Seventh.
To invest in the paid-up shares of building and loan associations and of other credit unions to an extent not to exceed 25 per centum of its capital, and in any investment legal for savings banks or for trust funds in the District of Columbia.
Eighth.
To make deposits in banks and trust companies in the District of Columbia under the supervision of the Comptroller of the Currency.
Ninth.
To borrow in an aggregate outstanding amount not exceeding 40 per centum of its paid-in and unimpaired capital.
Tenth.
To fine members for failure to meet promptly their obligations to such corporation.
Eleventh.
To impress a lien upon the shares and dividends of any member to the extent of any loan made to him and any dues or fines payable to him.
By-laws
Sec. 8.
The incorporators shall subscribe, acknowledge, and submit to the Commissioners of the District of Columbia proposed by-laws, and no credit union shall receive payments on account of
Approval.
shares or make any loans until such proposed by-laws have been approved by the commissioners as being in conformity with the provisions of this Act.
The by-laws shall prescribe the purposes for which the corporation is formed, the qualifications for membership, the date of the annual meeting, the manner of conducting meetings, the methods by which members shall be notified of meetings and the number of members which shall constitute a quorum, the number of directors and the compensation and duties of officers, the number of members of the credit committee, the fines, if any, to be charged for failure of members to meet promptly obligations to the corporation, the amount of the entrance fee, if any, to be paid, and such other regulations as are deemed necessary
Amendments of the by-laws may be adopted by a three-fourths vote of the members present at any members’ meeting, but the amendments shall not take effect until approved by the Commis-sioners of the District of Columbia as being duly adopted and in
Procedure and approval.
conformity with the provisions of this Act. The meeting shall be duly called for the purpose and the proposed amendments shall be set forth in the call.
Membership
Sec. 9.
Credit-union membership shall consist of the incorporators
Composition, qualifications, etc.
and such other persons or organizations as may be elected to membership and subscribe to at least one share but not more than two hundred shares by any one individual, pay the initial installment thereon, and the entrance fee, if any; except that credit-union membership shall be limited to groups the members of which are actual residents of or do business or are employed within the District of Columbia, and either have a common bond of occupation of association or reside within a well-defined neighborhood or community.
Member’s Meetings
Sec. 10.
The fiscal year of all credit unions shall end December
Fiscal year.
31. The annual meeting of the corporation shall be held at
Annual meetings in January.
such time during the month of January and at such place as the by-laws shall prescribe. Special meetings may be held in the manner
Special meetings.
indicated in the by-laws. No member shall be entitled to vote
Voting restrictions.
by proxy, but a member other than a natural person may vote through an agent delegated for the purpose. No member shall, irrespective of the number of shares held by him, have more than one vote; and, after a credit union has been incorporated one year, no member thereof shall be entitled to vote until he has been a member for more than three months. All offices of a credit union shall be
Location of offices.
in the District of Columbia.
Management
Sec. 11.
General.—The business affairs of a credit union shall
General organization.
be managed by a board of not less than five directors, a credit committee of not less than three members, and a supervisory committee of three members, to be elected at the annual meeting, and
Terms of office.
to hold office for such terms, respectively, as the by-laws may provide and until successors qualify; except that prior to the first annual
Management by subscribers.
meeting all the business affairs of a credit union shall be managed by the subscribers to the certificate of incorporation. A record of
Election returns.
the names and addresses of the members of the board and committees and the officers shall be filed with the Commissioners of the District of Columbia within ten days of their election. No member
Pay restrictions.
of the board or of either committee shall, as such, be compensated: Provided, That no person shall be elected to the board or to either
Proviso.
Qualifications.
committee unless he be duly elected to membership as provided in section 9 of this Act.
Officers.—At their first meeting after the annual meeting the
Officers.
Election, duties, etc.
directors shall elect from their own number a president, a vice president, a clerk, and a treasurer, who shall be the executive officers- of the corporation. The offices of clerk and treasurer may be held by the same person. The duties of the officers shall be as determined in the by-laws, except that the treasurer shall be the general manager of the corporation.
Directors.—The board of directors shall have the general
Directors.
Powers, duties, etc.
direction of the affairs of the corporation. They shall act upon application for membership; fix the amount of the surety bond required of any officer having custody of funds; recommend declaration of
Proviso.
Interest rate on loans.
dividends; determine interest rates on loans: Provided, however, That the interest rate on loans shall not be in excess of the maximum
Filling vacancies.
amount fixed by the provisions of this Act; fill vacancies in the board and in the credit committee until successors to be elected at the next annual meeting have qualified; have charge of investments other
Loans to nonmembers.
Maximum individual holdings and loans.
than loans to members; determine the maximum loans other than loans to members; determine the maximum individual share holdings and the maximum individual loan which can be made with and without
Security, if loan exceeds $50.
security, except that no loan in excess of $50 shall be made without adequate security; and transmit to the members recommended amendments to the by-laws. For the purposes of this subdivision an assignment of shares or the indorsement of a note shall be deemed security.
Credit Committee.—The credit committee shall hold meetings, of which due notice shall be given to its members, to consider applications for loans to members of the corporation, and no loan shall be made unless all members of the committee who are present when the application is considered and a majority of all the committee
Applications.
approve the loan. Applications for loans shall be on forms prepared by such committee, which shall set forth the purpose for which the loan is desired, the security, if any, and such other data as may be required.
Supervisory Committee.—The supervisory committee shall make an examination of the affairs of the credit union at least quarterly, including an audit of its books; shall make an annual audit and report to be submitted at the annual meeting of the corporation; by a unanimous vote may suspend any officer of the corporation, or any member of the credit committee or of the board of directors until the next members’ meeting, at which time the suspension shall be acted on by the members; and, by a majority vote, may call a meeting of the shareholders to consider any violation of this subchapter or of the by-laws, or any practice of the corporation deemed by the committee to be unsafe or unauthorized. The said committee shall fill vacancies in its membership until successors to be elected at the
Proviso.
Treasurer’s bond.
next annual meeting have qualified: Provided, however, That before the treasurer shall enter upon his duties he shall give bond with good and sufficient security, in an amount to be determined by the board of directors, conditioned upon the faithful performance of his trust.
Reserves
Sec. 12.
All entrance fees and fines provided by the by-laws and, before the declaration of any dividend therefrom, 20 per centum of the net earnings of each year, shall be set aside as a reserve fund against bad loans, which fund shall be kept liquid and intact and not distributed except in case of liquidation.
Dividends
Sec. 13.
At the annual meeting a dividend may be declared from net earnings on recommendation of the board, which dividend shall be paid on all paid-up shares outstanding at the end of the preceding fiscal year. Shares which become fully paid up during such year shall be entitled to a proportional part of said dividend calculated from the first day of the month following such payment in full.
Expulsion and Withdrawal
Sec. 14.
A member may be expelled by a two-thirds vote of the
Provisions governing.
members of the corporation present at a special meeting called for such purpose, but only after an opportunity has been given him to be heard. The credit union may require sixty days’ notice of intention to withdraw shares. Expulsion or withdrawal shall not operate to relieve a member from any remaining liability to the credit union. All amounts paid in on shares or deposited by expelled or withdrawing members prior to their expulsion or withdrawal shall be paid to them in the order of their withdrawal or expulsion, but only as funds become available and after deducting any amounts due from such members to the credit union.
Minors
Sec. 15.
Shares may be issued and deposits received in the name
Issuance of shares, etc., in name of, or in trust.
of a minor or in trust in such manner as the by-laws may provide. The name of the beneficiary shall be disclosed to the credit union.
Taxation
Sec. 16.
Credit unions, but not the members thereof, shall be
Credit unions exempt, except on real property.
exempt from Federal and District of Columbia taxation except taxes upon real propery.11 So in original.
Restriction on Use of Words “Credit Union”
Sec. 17.
It shall be unlawful for any individual, partnership,
Use of name restricted to legitimate organizations.
association, or corporation, except corporations organized in accordance with this Act, to transact business in the District of Columbia under any name or title containing the words “credit union,” or to transact business at any place in the United States under any name or title containing the words “credit union” and “District of Columbia” or other words indicating that the business is transacted pursuant to authority of any Act of Congress. Any individual, partnership, association, or corporation violating this section shall
Penalty for violation.
upon conviction thereof be subject to a fine not in excess of $100 for each day during which the violation continues.
Sec. 18.
Congress reserves the right to alter, amend, or repeal
Rights reserved.
this Act or any part thereof, or any charter or certificate of incorporation issued pursuant to the provisions of this Act.
Approved, June 23, 1932.