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Regulation by department - 17 Pa. Cons. Stat. § 503Legal Research Home > Pennsylvania Statutes
§ 503. Regulation by department.
(a) General rule.--Credit unions shall be under the
supervision of the department. The department is hereby
authorized and empowered to issue general rules and regulations
and specific orders for the protection of members of credit
unions, for insuring the conduct of the business of credit
unions on a safe and sound basis and for the effective
enforcement of this title. Credit unions shall report to the
department as often as may be required by it and at least
annually on forms supplied by the department for that purpose.
Supplementary reports may be required by the department from
time to time. Credit unions shall be examined as often as may be
required by the department and at least annually, and the
department may use such other methods of assuring itself of the
condition of the credit unions as it shall deem advisable. The
cost of all such examinations and inspections shall be paid by
the credit union. A credit union shall also pay annually its
proportionate share of the overhead expense of the department
determined by regulation of the department. The department shall
give written notice to each credit union of the costs of
examinations, investigations and the credit union's
proportionate share of the overhead expenses of the department.
The credit union shall pay the amount of such costs within 30
days of the notice. If payment is not made within 30 days of the
notice, the department may assess a penalty fee of $150 for that
30-day period and each successive 30-day period of delinquency.
For failure to file reports when due, unless excused for cause,
a credit union shall pay to the department $100 for each day of
its delinquency.
(a.1) Fines, removals, prohibition, suspension.--For any
violation of this title or regulation issued pursuant to this
title or any final order issued by the department under this
title or any unsafe or unsound practice or breach of fiduciary
duty involving a credit union, the department may take any one
or more of the following actions:
(1) The department may impose a civil penalty of up to
$10,000 for each violation of this title against a credit
union or any director, officer, committee member, employee,
volunteer or agent of a credit union.
(2) The department may immediately suspend any director,
officer, committee member, employee, volunteer or agent of a
credit union from his or her position at a credit union and
from any further participation in the conduct of the affairs
of the credit union, if in the opinion of the department the
credit union or its members have suffered or may suffer any
significant financial harm or other prejudice. To suspend a
person pursuant to this paragraph, the department shall
provide a notice containing a statement of the facts
constituting grounds for removal and shall indicate a time
and place for a hearing. The hearing shall be fixed for a
date between 30 days and 60 days from the date of service of
notice unless an earlier or later date is set by the
department at the request of the person.
(3) The department may remove any director, officer,
committee member, employee, volunteer or agent of a credit
union from his or her position at a credit union and prohibit
him or her from participating in the conduct of the affairs
of the credit union in any manner for such time as the
department deems appropriate.
(4) The department may prohibit any director, officer,
committee member, employee, volunteer or agent of a credit
union under the jurisdiction of the department from working
in any capacity in any and all credit unions for such time as
the department determines to be appropriate.
(a.2) Hearings and subpoenas.--
(1) The department may conduct administrative hearings
on any matter pertaining to this title, subject to the
provisions of 2 Pa.C.S. Chs. 5 Subch. A (relating to practice
and procedure of Commonwealth agencies) and 7 Subch. A
(relating to judicial review of Commonwealth agency action).
(2) In connection with any examination, investigation or
administrative hearing, the department may issue subpoenas
requiring the attendance of or the production of pertinent
instruments, documents, accounts, books and records by the
directors, officers, committee members, employees, volunteers
or agents, respectively, of any credit union. In connection
with any such examination, investigation or administrative
hearing, the department may also question any such witness
under oath or affirmation and examine any such instrument,
document, accounts, books and records and retain the records
until the proceedings are concluded.
(3) The department may administer oaths and affirmations
to any person whose testimony is required at any
administrative hearing or at any other time authorized by
this title.
(4) Any privileges available to Federal financial
institution regulators under Federal statute, regulation or
common law shall be available to the department. The service
of a subpoena upon any employee of the department shall not
require such person to immediately disclose any information.
Such person shall have all rights and privileges to object to
production of information.
(5) If any credit union or person fails to comply with
any subpoena, suspension notice or final order issued under
this title, then the department may enforce any of the
foregoing in Commonwealth Court. The Commonwealth Court shall
enter an order to enforce any such subpoena, suspension
notice or final order.
(b) Suspension of personnel.--(Deleted by amendment).
(c) Seizure of credit union.--
(1) If the department determines that a credit union is:
(i) violating any of the provisions of this title or
any rule or regulation of the department issued under the
authority of this title or any order issued by the
department under the authority of this title that has
become final;
(ii) conducting its business in an unsafe manner;
(iii) in an unsafe or unsound condition to transact
its business;
(iv) significantly undercapitalized or critically
undercapitalized according to the prompt corrective
action standards of the National Credit Union
Administration consistent with the Federal Credit Union
Act (48 Stat. 1216, 12 U.S.C. § 1751 et seq.) and related
regulations; or
(v) insolvent;
the department may, in its discretion, at such time set by
the department, take possession of the business and property
of the credit union and retain possession until such time as
the condition predicating such action is remedied or until
the affairs of the credit union are finally liquidated.
(2) The department shall take possession of a credit
union by serving a written notice of seizure on the credit
union's board of directors that contains a statement of the
facts constituting grounds for seizure of the credit union
and that contains notice of a hearing and an opportunity to
be heard. Upon taking possession of a credit union, the
department may liquidate the credit union, appoint the
National Credit Union Administration to liquidate the credit
union pursuant to Federal law or appoint such other agent or
employee of the department to liquidate the credit union or
take any other action the department deems appropriate
regarding the credit union.
(3) The department may take similar action if any report
is not filed within a period of 15 days after it is due.
(4) Any person aggrieved by the action of the department
in taking possession of a credit union may appeal within ten
days of commencement of the receivership, whereupon the
matter shall be set down for hearing de novo.
(d) Exchange of reports of examination.--
(1) Whenever the shares of a credit union are insured by
the National Credit Union Share Insurance Fund or any other
share insurance fund approved by the department, the
department may furnish to the Administrator of the National
Credit Union Administration or to any other approved insurer
any reports of examination made by the department under this
section or any credit union board resolution or enforcement
document including any order issued by the department
regarding the particular credit union.
(2) The department may furnish to any outside accountant
or trade organization contracted by the credit union or
authorized by the department to satisfy the audit
requirements in this title or meet specifications as defined
in any order any reports of examination made by the
department under this section or any credit union board
resolution or enforcement document including orders issued by
the department.
(3) If a Pennsylvania credit union conducts business in
another state through the establishment and operation of
additional branch offices and service facilities under
section 904 (relating to place of business), the department
may furnish to the financial regulatory agency of that state
reports of examination, credit union board resolutions or any
enforcement document including orders issued by the
department regarding the particular credit union.
(e) Report.--A credit union shall furnish to the department
copies of the report of financial condition, known as the call
report, in the same form and with the same frequency that the
credit union is required to provide the report to the National
Credit Union Administration.
(f) Disclosure of information.--The department may not
disclose any credit union information in its custody that
relates to an individual unless that individual consents.
(Dec. 12, 1994, P.L.1067, No.146, eff. 60 days; Dec. 9, 2002,
P.L.1572, No.207, eff. 60 days)
Cross References. Section 503 is referred to in section 1303
of this title.
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Last modified: November 27, 2007 |