Code Section Group

Financial Code - FIN

DIVISION 5. CREDIT UNIONS [14000 - 16906]

  ( Division 5 repealed and added by Stats. 1979, Ch. 112. )

CHAPTER 4. Management and Operations [14400 - 14768]

  ( Chapter 4 added by Stats. 1979, Ch. 112. )

ARTICLE 4. Supervisory Committee [14550 - 14556]
  ( Article 4 added by Stats. 1979, Ch. 112. )

14550.
  

Every credit union shall have a supervisory committee of at least three persons, provided that the number of members on the committee is an odd number, each of whom shall be a member of the credit union and elected by the members of the credit union. In the alternative, the board of directors may establish an audit committee subject to the requirements of Section 14556.

(Amended by Stats. 2016, Ch. 353, Sec. 5. Effective January 1, 2017.)

14551.
  

The supervisory committee may:

(a) Suspend at any time by unanimous vote, at a meeting called for that purpose, the credit committee, or any member thereof, or the credit manager, or any member of the board of directors, or any officer.

(b) By a majority vote call a meeting of the members to consider any violation of this division or the bylaws, or any practices of the credit union which, in the opinion of the committee, are unsafe or unauthorized.

(c) Inspect the securities, cash, and accounts of the credit union.

(d) Fill vacancies in the supervisory committee until the next annual meeting of the members.

(e) Declare vacant any office of a member of the supervisory committee if such member is absent from three consecutive regular meetings of the supervisory committee unless excused therefrom or is completely inactive as a member of the supervisory committee for a consecutive 12 months’ period.

(Amended by Stats. 1996, Ch. 330, Sec. 1. Effective January 1, 1997.)

14551.5.
  

The supervisory committee shall be responsible for reviewing the credit union’s policies and control procedures to safeguard against fraud and self-dealing, and the supervisory committee shall exercise whatever efforts are necessary pursuant to Sections 14551 and 14553 to meet those responsibilities.

(Added by Stats. 1996, Ch. 330, Sec. 2. Effective January 1, 1997.)

14552.
  

The supervisory committee shall, within seven days after suspension of any or all members of the credit committee, or any member of the board of directors, or any other officer, cause notice of a special meeting to be given to the members to take such action regarding the suspension as the members deem necessary.

(Amended by Stats. 1985, Ch. 951, Sec. 9.)

14553.
  

(a) The supervisory committee shall at least once each year make or cause to be made an audit of the books and records and an examination of the business and affairs of the credit union. The supervisory committee shall make a full report of the assets and liabilities, receipts and disbursements of the credit union to the board of directors. Those reports shall be presented at the annual meeting of members and filed with the records of the credit union.

(b) The supervisory committee may make or cause to be made any supplementary inspections of the securities, cash, and accounts of the credit union or audits as it deems necessary, and submit reports of those audits to the board of directors.

(Amended by Stats. 1998, Ch. 539, Sec. 23. Effective January 1, 1999.)

14554.
  

No member of the supervisory committee shall serve as a member of the credit committee, as the credit manager, as a member of the board of directors, or as an employee of the credit union.

(Amended by Stats. 1982, Ch. 691, Sec. 6.)

14555.
  

The commissioner may, after investigation and finding that the supervisory committee is not performing in conformance with this article, declare all offices of the supervisory committee of a credit union vacant and shall direct the board of directors of the credit union to call a special meeting of the members for the purpose of electing a new supervisory committee to serve until the next regular annual meeting.

(Amended by Stats. 1979, Ch. 811.)

14556.
  

(a) The board of directors may, by resolution, establish an audit committee in lieu of a supervisory committee. An audit committee that meets all the requirements of this section shall be deemed to satisfy the requirements for a supervisory committee set forth in Sections 14550 to 14555, inclusive, or in any applicable bylaw provision.

(b) The vote of the board of directors to establish an audit committee in lieu of a supervisory committee shall be affirmed by a majority vote of members voting. Following the affirmative vote of the membership, the supervisory committee shall be deemed dissolved upon the appointment of an audit committee by the board of directors.

(c) The audit committee shall consist of at least three persons, provided that it is an odd number, each of whom shall be a member of the credit union and appointed by a majority of the board of directors. The audit committee may be comprised of directors, or both directors and non-directors, provided that no less than a majority of the members of the audit committee at any given time shall be comprised of directors. No member of the audit committee shall serve as a member of the credit committee, as the credit manager, as the board chairman, or as an employee of the credit union.

(d) The audit committee shall carry out the responsibilities set forth in subdivision (c) of Section 14551 and Sections 14551.5 and 14553 and shall:

(1) Ensure that the credit union complies with Section 14252.

(2) Ensure that the credit union maintains an effective internal audit program, including a system of internal controls and individuals with sufficient training and experience to adequately and timely review all key areas of a credit union’s operations.

(e) The board of directors may, by subsequent resolution, reestablish a supervisory committee in lieu of an audit committee, which shall be affirmed by membership vote. The audit committee shall be deemed dissolved upon the election of a supervisory committee by the membership.

(Added by Stats. 2016, Ch. 353, Sec. 6. Effective January 1, 2017.)

FINFinancial Code - FIN4.