[Rev. 11/22/2013 10:22:12 AM--2013]

[NAC-678 Revised Date: 1-07]

CHAPTER 678 - CREDIT UNIONS

678.002            Definitions.

678.004            “Commissioner” defined.

678.006            “Division” defined.

678.008  “Unimpaired capital and surplus” interpreted.

678.010            Formation.

678.020            Surety bonds: Annual review; minimum coverage.

678.030            Fidelity bonds: General requirements.

678.035            Disclosure of fees charged for services provided.

678.050            Reserve for liquidity; demand deposits.

678.060            Borrowings.

678.070            Special reserves against losses.

678.100            Investments.

678.110            Financial reports.

678.120            Accounting Manual for Federal Credit Unions.

678.130            Examinations.

678.140            Notification and revision of schedule of fees.

678.150            Fee for supervision and examination: Collection; determination of amount; failure to pay; penalty; additional costs.

678.155            Assessment for costs related to audits and examinations.

678.160            Fee for license.

678.165  Fees for foreign credit unions.

678.170            Conversion from another state charter to Nevada charter.

678.180            Conversion from federal to state charter.

678.190            Voluntary dissolution.

678.200            Regular reserves of central credit unions: “Risk assets” defined.

678.210  Retention of records.

678.220  Failure to respond to complaint; confidentiality of complaint and certain related information.

 

 

      NAC 678.002  Definitions. (NRS 678.250)  As used in this chapter, unless the context otherwise requires, the words and terms defined in NAC 678.004 and 678.006 have the meanings ascribed to them in those sections.

     (Added to NAC by Comm’r of Financial Institutions by R002-00, eff. 3-13-2000)

      NAC 678.004  “Commissioner” defined. (NRS 678.250)  “Commissioner” means the Commissioner of Financial Institutions.

     (Added to NAC by Comm’r of Financial Institutions by R002-00, eff. 3-13-2000)

      NAC 678.006  “Division” defined. (NRS 678.250)  “Division” means the Division of Financial Institutions of the Department of Business and Industry.

     (Added to NAC by Comm’r of Financial Institutions by R002-00, eff. 3-13-2000)

      NAC 678.008  “Unimpaired capital and surplus” interpreted. (NRS 678.250, 678.710)  For the purposes of this chapter and NRS 678.710, the Division shall interpret the term “unimpaired capital and surplus” to mean shares plus postclosing, undivided earnings. The term does not include regular reserves or special reserves required by this chapter or chapter 678 of NRS.

     (Added to NAC by Comm’r of Financial Institutions by R110-06, eff. 6-28-2006)

      NAC 678.010  Formation. (NRS 678.250, 678.270, 678.310)

     1.  Any person desiring to form a credit union pursuant to chapter 678 of NRS must:

     (a) Complete the Organization Certificate, Confidential Report of Officials, Agreement by Director and Committeemen to Serve, Report of Officials and Credit Union Investigation Report provided by the Commissioner.

     (b) Submit the forms required by paragraph (a) to the Commissioner, together with an investigation fee of $750 and a charter fee of $300.

     2.  The Commissioner will investigate and determine whether the proposed Organization Certificate conforms to the requirements of chapter 678 of NRS concerning the general character and fitness of the subscribers thereto, and determine the economic feasibility of establishing the proposed credit union.

     3.  If the Commissioner is satisfied that the qualifications have been met, he will issue a charter to the proposed credit union.

     [Comm’r of Credit Unions, § A subsecs. 1-3, eff. 8-12-76; A 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R002-00, 3-13-2000; R110-06, 6-28-2006)

      NAC 678.020  Surety bonds: Annual review; minimum coverage. (NRS 678.250, 678.260)

     1.  The board of directors of each credit union shall annually review the surety bond coverage it has in force in order to determine its adequacy in relation to the credit union’s exposure to potential cash losses.

     2.  A credit union’s minimum potential cash losses must be determined by the following table:

 

 

Assets

 

Minimum Coverage

 

 

 

 

$0

to

$5,000

..................................................................... $1,000

5,001

to

10,000

......................................................................  2,000

10,001

to

20,000

......................................................................  4,000

20,001

to

30,000

......................................................................  6,000

30,001

to

40,000

......................................................................  8,000

40,001

to

50,000

..................................................................... 10,000

50,001

to

75,000

..................................................................... 15,000

$75,001

to

$100,000

................................................................... $20,000

100,001

to

150,000

..................................................................... 30,000

150,001

to

200,000

..................................................................... 40,000

200,001

to

300,000

..................................................................... 50,000

300,001

to

400,000

..................................................................... 60,000

400,001

to

500,000

..................................................................... 70,000

500,001

to

750,000

..................................................................... 85,000

750,000

to

1,000,000

................................................................... 100,000

1,000,001

to

50,000,000

........... $100,000 plus $50,000 for each $1,000,000

or fraction thereof of assets over $1,000,000

$50,000,001

to

$150,000,000

........ $2,500,000 plus $25,000 for each $1,000,000

or fraction thereof of assets over $50,000,000

Over $150,000,000.......................................................................................................... $5,000,000

 

     3.  Any credit union whose cash change funds exceed the amounts of minimum coverage required for a credit union of its size, as set forth in subsection 2, shall maintain surety bond coverage adequate to cover its actual potential cash loss.

     [Comm’r of Credit Unions, § B subsecs. 1 & 7, eff. 8-12-76; A and renumbered as § C subsecs. 1-3, 12-14-78]

      NAC 678.030  Fidelity bonds: General requirements. (NRS 678.250, 678.370, 678.420)

     1.  All fidelity bonds must provide coverage for the faithful performance of any officer or employee while carrying out any of the duties of the treasurer as prescribed in chapter 678 of NRS, the bylaws, or rules and regulations.

     2.  No form of fidelity bond coverage may be used by a credit union except a form which is approved by the Commissioner.

     3.  For the purpose of this section, forms of fidelity bond coverage for credit unions that are provided by surety companies authorized to do business in this State are approved.

     4.  The Commissioner may require additional fidelity bond coverage for any credit union when, in his opinion, the bonds in force are insufficient to provide adequate coverage. The board of directors of the credit union shall obtain such additional coverage within 30 days after the date of written notice from the Commissioner.

     5.  All surety companies writing credit union fidelity bonds must hold a Certificate of Authority from the Secretary of the Treasury pursuant to 31 U.S.C. §§ 9304-9308 as an acceptable surety on federal bonds in this State.

     6.  The board of directors of each credit union shall provide proper protection to meet any circumstance described in subsection 1 of NRS 678.370 by obtaining adequate bond and insurance coverage.

     [Comm’r of Credit Unions, § B, subsecs. 2-6, eff. 8-12-76; A and renumbered as § C subsecs. 4-8, 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R002-00, 3-13-2000)

      NAC 678.035  Disclosure of fees charged for services provided. (NRS 678.250, 678.480)  A credit union may charge for services it provides if it discloses such fees to the customer before imposing the fees on the customer.

     (Added to NAC by Comm’r of Financial Institutions by R002-00, eff. 3-13-2000)

      NAC 678.050  Reserve for liquidity; demand deposits. (NRS 678.250, 678.680)

     1.  A credit union shall hold liquid assets in an amount equal to at least 5 percent of its members’ accounts.

     2.  The Commissioner may issue an order requiring a credit union to cease and desist from offering demand deposit accounts if it fails to maintain the reserve for liquidity as required by subsection 1.

     3.  Every credit union which maintains a demand deposit program shall post a notice in the manner prescribed by subsection 1 of NRS 205.134 concerning issuance of a check or draft without funds or with intent to defraud.

     [Comm’r of Credit Unions, § C, eff. 8-12-76; A and renumbered as § D, 12-14-78; A 2-6-81]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R002-00, 3-13-2000)

      NAC 678.060  Borrowings. (NRS 678.250)  No credit union, with the exception of a central credit union, may have at any one time outstanding borrowings which exceed 50 percent of its unimpaired capital and surplus.

     [Comm’r of Credit Unions, § E, eff. 8-12-76; A and renumbered as § F, 12-14-78]

      NAC 678.070  Special reserves against losses. (NRS 678.250, 678.680)  If the Commissioner deems the reserves required by NRS 678.670 inadequate to cover a credit union’s delinquent loans, he will require, upon 5 days’ written notice, that the credit union maintain a special reserve against losses equal to 10 percent of the loan balance on all accounts that are between 2 and 6 months delinquent, plus 25 percent of the loan balances on all accounts that are between 7 and 12 months delinquent, plus 80 percent of the loan balances on all accounts that are more than 12 months delinquent.

     [Comm’r of Credit Unions, § D, eff. 8-12-76; A and renumbered as § E, 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R002-00, 3-13-2000)

      NAC 678.100  Investments. (NRS 678.250, 678.760)  The stocks and bonds which the Commissioner approves as investments for credit unions pursuant to subsection 8 of NRS 678.760 are the stocks and bonds which are accorded one of the top two ratings by a statistical rating organization that is nationally recognized by the Securities and Exchange Commission. Investment by a credit union in securities which are provisionally rated is prohibited.

     [Comm’r of Credit Unions, § P, eff. 2-6-81]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R002-00, 3-13-2000)

      NAC 678.110  Financial reports. (NRS 678.250, 678.780)  Each credit union shall file with the Commissioner a financial report that is substantially similar to the report provided by the credit union to the National Credit Union Administration or the private insurer of the credit union, as applicable. Such a report must be submitted:

     1.  For the first 6 months of the calendar year which ends on June 30; and

     2.  For the entire calendar year.

     [Comm’r of Credit Unions, § L, eff. 2-6-81]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R002-00, 3-13-2000)

      NAC 678.120  Accounting Manual for Federal Credit Unions. (NRS 678.250)  The Accounting Manual for Federal Credit Unions must be used as the standard for accounting practices for state chartered credit unions.

     [Comm’r of Credit Unions, § A subsec. 4, eff. 8-12-76; A and renumbered as § K, 12-14-78]

      NAC 678.130  Examinations. (NRS 678.250, 678.790)  Any examination required by the provisions of chapter 678 of NRS must be conducted in accordance with the procedures established by the Commissioner.

     [Comm’r of Credit Unions, § I, eff. 8-12-76; A and renumbered as § J, 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R002-00, 3-13-2000)

      NAC 678.140  Notification and revision of schedule of fees. (NRS 678.250)

     1.  Each credit union will be notified at least 30 days before the effective date of any schedule of fees fixed pursuant to this chapter.

     2.  Upon receipt of such notification, interested persons may submit written data, views and arguments for consideration by the Commissioner. The Commissioner may, after consideration, make such revisions in the proposed schedule or such change in the effective date as he deems necessary and proper, with the advice and consent of the Credit Union Advisory Council.

     3.  Each credit union will be notified not less than 15 days before the final effective date.

     [Comm’r of Credit Unions, § A subsec. 8, eff. 8-12-76]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R002-00, 3-13-2000)

      NAC 678.150  Fee for supervision and examination: Collection; determination of amount; failure to pay; penalty; additional costs. (NRS 678.250, 678.270)

     1.  On or before June 30 of each year, the Commissioner will collect a fee from each credit union for the supervision and examination of the credit union pursuant to chapter 678 of NRS.

     2.  The fee is based on the portion of the annual appropriation from the State General Fund to the Division that is attributable to the supervision and examination of credit unions. Each credit union shall pay a share of that amount as determined by the following schedule:

 

     Total Assets

Base Fee

+ Fee Exceeding Base

 

 

 

Less than $5,000,000

$5,000

N/A

 

 

 

$5,000,000 or more, but

less than $10,000,000

5,000

     $.25 per thousand of assets exceeding $5,000,000

 

 

 

$10,000,000 or more, but

less than $50,000,000

6,250

     $.19 per thousand of assets exceeding $10,000,000

 

 

 

$50,000,000 or more, but

less than $100,000,000

13,850

     $.12 per thousand of assets exceeding $50,000,000

 

 

 

$100,000,000 or more, but

less than $500,000,000

19,850

     $.10 per thousand of assets exceeding $100,000,000

 

 

 

$500,000,000 or more, but

less than $1,000,000,000

59,850

     $.07 per thousand of assets exceeding $500,000,000

 

 

 

$1,000,000,000 or more,

but less than

$3,000,000,000

94,850

     $.05 per thousand of assets exceeding $1,000,000,000

 

 

 

$3,000,000,000 or more,

but less than

$10,000,000,000

194,850

     $.03 per thousand of assets exceeding $3,000,000,000

 

 

 

$10,000,000,000 or more,

but less than

$20,000,000,000

404,850

     $.02 per thousand of assets exceeding $10,000,000,000

 

Any adjustment to the fee required to account for the distribution of unused portions of or increases in the annual appropriation from the State General Fund must be made in a proportionate amount that is based on the relationship that the fee determined for each credit union pursuant to this subsection bears to the total fee imposed on all credit unions licensed pursuant to chapter 678 of NRS.

     3.  If the fee is not paid on or before June 30, the Commissioner will assess a penalty of 10 percent of the amount of the fee and an additional 1 percent of the fee for each month or portion of a month that the fee is not paid. The Commissioner may waive the penalty for good cause.

     4.  The fee does not include the cost of any extraordinary examination, audit, investigation or hearing conducted by the Division. The cost of any such examination, audit, investigation or hearing is $60 per hour.

     [Comm’r of Credit Unions, § A subsecs. 6 & 7, eff. 8-12-76; + § B subsec. 2, eff. 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions, 4-20-88; 6-17-91; R002-00, 3-13-2000)

      NAC 678.155  Assessment for costs related to audits and examinations. (NRS 678.250, 678.795)

     1.  Except as otherwise provided in NAC 658.030, each credit union shall pay to the Division an annual assessment of $300 to cover the costs related to the employment of a certified public accountant and the performance of audits and examinations conducted by the Division.

     2.  The Division will bill each credit union for the assessment. The assessment must be paid within 30 days after the date the bill is received.

     3.  A charge of 10 percent of the assessment will be imposed on any credit union whose assessment is received by the Division after the date on which the assessment is due.

     (Added to NAC by Comm’r of Financial Institutions, eff. 12-17-87; A 5-27-92; R002-00, 3-13-2000)

      NAC 678.160  Fee for license. (NRS 678.250, 678.270)

     1.  Not later than January 31 of each year, each credit union shall pay to the Division a license fee of $300.

     2.  A credit union which has been chartered under the laws of another jurisdiction and converts to a credit union chartered under the laws of this State shall pay a percentage of the license fee based on the number of days remaining in the year, assuming a 360-day year, and the total assets of the credit union as of the end of the month before the conversion. The prorated fee is due within 30 days after the conversion.

     3.  A credit union which receives a new charter, other than by conversion, is not required to pay the license fee until January 31 following its receipt of the charter.

     [Comm’r of Credit Unions, § A subsec. 5; A and renumbered as § B, 12-14-78; A 2-6-81]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions, eff. 4-20-88; R002-00, 3-13-2000; R110-06, 6-28-2006)

      NAC 678.165  Fees for foreign credit unions. (NRS 678.250, 678.3435)

     1.  An application for an initial certificate of authority submitted by a foreign credit union pursuant to NRS 678.343 must be accompanied by a nonrefundable fee of $750.

     2.  The annual fee for renewal for:

     (a) The initial office is $750; and

     (b) Each branch office is $150.

     (Added to NAC by Comm’r of Financial Institutions by R110-06, eff. 6-28-2006)

      NAC 678.170  Conversion from another state charter to Nevada charter. (NRS 678.250, 678.810)  A credit union chartered by another state may apply for provisional acceptance by the Commissioner by submitting all the items listed in subsection 1 of NAC 678.180 and:

     1.  A copy of the last examination report of its present state supervisory authority; and

     2.  If it is uninsured, a copy of its application for insurance of its members’ accounts.

     [Comm’r of Credit Unions, § N, eff. 12-14-78; A and renumbered as § O, 2-6-81]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R002-00, 3-13-2000)

      NAC 678.180  Conversion from federal to state charter. (NRS 678.250, 678.810)

     1.  A federal credit union desiring to convert to a state-chartered credit union must provide the Commissioner with the following:

     (a) A confidential report of the credit union’s officials, with their social security numbers;

     (b) The completed forms for filing articles of incorporation with the Secretary of State;

     (c) An agreement to serve, executed by the board of directors, and, if applicable, by the credit committee and supervisory committee;

     (d) A copy of the last three monthly financial and statistical reports;

     (e) A copy of the last two year-end financial and statistical reports furnished to the National Credit Union Administration;

     (f) A copy of the delinquent loan schedule as of the last month’s end, accompanied by notations on the collectibility of each loan;

     (g) A copy of the last audit report of the credit union’s supervisory committee;

     (h) A copy of the last examination report of the National Credit Union Administration; and

     (i) Any other information the Commissioner may consider necessary or desirable.

     2.  Within 30 days after receipt of the items listed in subsection 1, the Commissioner will inform the credit union, in writing, of his decision provisionally to accept or not to accept the credit union’s conversion.

     3.  If the Commissioner has provisionally accepted the conversion of a credit union from a federal to a state charter, he will issue a charter to the credit union upon a satisfactory demonstration by the credit union that it has completed all of the conversion requirements imposed upon it by the National Credit Union Administration.

     [Comm’r of Credit Unions, § M, eff. 12-14-78; renumbered as § N, 2-6-81]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R002-00, 3-13-2000)

      NAC 678.190  Voluntary dissolution. (NRS 678.250, 678.820)  The board of directors shall give the Commissioner 10 days’ written notice of its intention to put the question of voluntary dissolution to the members of its credit union.

     [Comm’r of Credit Unions, § P, eff. 12-14-78; renumbered as § R, 2-6-81]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84; A by Comm’r of Financial Institutions by R002-00, 3-13-2000)

      NAC 678.200  Regular reserves of central credit unions: “Risk assets” defined. (NRS 678.250, 678.875)  For the purpose of NRS 678.875, “risk assets” has the meaning ascribed to it in NRS 678.690.

     [Comm’r of Credit Unions, § O, eff. 12-14-78; renumbered as § Q, 2-6-81]

      NAC 678.210  Retention of records. (NRS 678.250, 678.260)

     1.  Except as otherwise provided in this section, a credit union may destroy a record 1 year after the date on which the record is created.

     2.  A credit union shall retain permanently the following records:

     (a) The charter and bylaws of the credit union, and any amendments thereto;

     (b) Proof of each license to operate as a financial institution granted to the credit union pursuant to federal law or the law of any state, including, without limitation, a certificate to act as an issuing agent for the sale of United States Savings Bonds; and

     (c) Records of the operation of the credit union, including, without limitation:

          (1) Minutes of all meetings of the members, board of directors, credit committee and audit committee;

          (2) A copy of each financial report required pursuant to NAC 678.110 or an equivalent form filed by the credit union;

          (3) A copy of each comprehensive annual audit of the audit committee and each accompanying report and attachment;

          (4) Records of account verification of the audit committee;

          (5) Applications for membership and account agreements of members;

          (6) A copy of each periodic statement of members and individual share and loan ledgers, including, without limitation, a complete record of all accounts of members; and

          (7) A list of all records that are destroyed pursuant to subsection 1.

     3.  Applications for membership and account agreements of a person who is not a member of the credit union must be retained for a period of 7 years after the date on which the credit union determines the record is no longer useful.

     4.  A record that is otherwise required to be retained by state statute or federal law must be retained in accordance with that statute or law.

     5.  Records of a credit union may be retained in any format that can be readily reproduced, including, without limitation, original paper format, machine copy or electronic format, and must:

     (a) Accurately reflect the information contained in the record;

     (b) Be capable of reproduction for a person who is entitled to access that record; and

     (c) Be capable of being transmitted, printed or otherwise disseminated.

     (Added to NAC by Comm’r of Financial Institutions by R110-06, eff. 6-28-2006)

      NAC 678.220  Failure to respond to complaint; confidentiality of complaint and certain related information. (NRS 678.250)

     1.  If a licensed credit union, or an authorized representative of that credit union, fails to respond to the Commissioner within 20 business days after receiving written notice that a complaint has been filed against the credit union, the credit union is deemed to have admitted to the allegations contained in the complaint.

     2.  Subject to the discretion of the Commissioner and except as otherwise provided by specific statute, a complaint filed with the Division, any documents filed with the complaint, and any report or information resulting from an investigation of a complaint are confidential.

     (Added to NAC by Comm’r of Financial Institutions by R110-06, eff. 6-28-2006)