An Act to provide insurance far member accounts in State and federally chartered credit unions, and for other purposes
PL 91-468 (S.3822), enacted 10/19/1970

994 
PUBLIC LAW 91-468-OCT. 19, 1970 
[84 STAT. 
Public Law 91-468 
October 19, 1970 
[S.3822] 
Federal and 
State credit 
unions. 
Share insur-
ance. 
73 Stat, 628. 
Ante, p. 49. 
12 u s e 1752-
1772a. 
82 Stat. 285. 
AN ACT 
To provide insurance for member accounts in State and federally chartered 
credit unions and for other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That the Federal 
Credit Union Act, as amended (12 U.S.C. 1751-1775), is further 
amended— 
(1) by inserting immediately above the heading of section 2 
the following: 
"TITLE I—FEDERAL CEEDIT UNIONS"; 
(2) by redesignating sections 2 through 28 as sections 101 
through 127, respectively; and 
(3) by inserting the following new title after section 127, 
as redesignated by paragraph (2) of this section: 
"TITLE II—SHARE INSURANCE 
a 
Application, 
agreement. 
INSURANCE OF MEMBER ACCOUNTS AND ELIGIBILITY PROVISIONS 
"SEC. 201. (a) The Administrator, as hereinafter provided, shall 
insure the member accounts of all Federal credit unions and he may 
insure the member accounts of (1) credit unions organized and oper-
ated according to the laws of any State, the District of Columbia, the 
several territories and possessions of the United States, the Panama 
Canal Zone, or the Commonwealth of Puerto Rico, and (2) credit 
unions organized and operating under the jurisdiction of the Depart-
ment of Defense if such credit unions are operating in compliance 
with the requirements of title I of this Act and regulations issued 
thereunder. 
"(b) Application for insurance of member accounts shall be made 
immediately by each Federal credit union and may be made at any 
time by a State credit union or a credit union operating under the 
jurisdiction of the Department of Defense. Applications for such 
insurance shall be in such form as the Administrator shall provide 
and shall contain an agreement by the applicant— 
"(1) to pay the reasonable cost of such examinations as the 
Administrator may deem necessary in connection with determin-
ing the eligibility of the applicant for insurance: Provided, That 
examinations required under title I of this Act shall be so con-
ducted that the information derived therefrom may be utilized 
for share insurance purposes, and examinations conducted by 
State regulatory agencies shall be utilized by the Administrator 
for such purposes to the maximum extent feasible; 
" (2) to permit and pay the reasonable cost of such examinations 
as in the judgment of the Administrator may from time to time be 
necessary for the protection of the fund and of other insured 
credit unions; 
" (3) to permit the Administrator to have access to any informa-
tion or report with respect to any examination made by or for 
any public regulatory authority, including any commission, board, 
or authority having supervision of a State-chartered credit union, 
and furnish such additional information with respect thereto 
as the Administrator may require; 
84 STAT. ] 
t'UBLIC LAW 91-468-OCT. 19, 1970 
9Sf5 
"(4) to provide protection and indemnity against burglary, 
defalcation, and other similar insurable losses, of the tyj)e, m the 
form, and in an amount at least equal to that required by the laws 
under which the credit union is organized and operates; 
"(5) to maintain such regular reserves as may be required by 
the laws of the State, district, territory, or other jurisdiction pur-
suant to which it is organized and operated, in the case of a State-
chartered credit union, or as may be required by section 116 of this 
Act, in the case of a Federal credit union; 
^°*^' P- ^O^^* 
"(6) to maintain such special reserves as the Administrator, by 
regulation or in special cases, may require for protecting the inter-
est of members or to assure that all insured credit unions maintain 
regular reserves which are not less than those required under title 
I of this Act; 
Ante, 
p, 
994. 
"(7) not to issue or have outstanding any account or security 
the form of which, b^ regulation or in special cases, has not been 
approved by the Administrator; 
" (8) to pay the premium charges for insurance imposed by this 
title; and 
" (9) to comply with the requirements of this title and of regu-
lations prescribed by the Administrator pursuant thereto. 
"(c) (1) Before approving the application of any credit union for 
insurance of its member accounts, the Administrator shall consider— 
"(A) the history, financial condition, and management policies 
of the applicant; 
"(B) the economic advisability of insuring the applicant with-
out undue risk of the fund; 
"(C) the general character and fitness of the applicant's man-
agement ; 
"(D) the convenience and needs of the members to be served by 
the applicant; and 
"(E) whether the applicant is a cooperative association orga-
nized for the purpose of promoting thrift among its members and 
creating a source of credit for provident or productive purposes. 
"(2) The Administrator shall reject the application of any credit 
union for insurance of its member accounts if he finds that its 
reserves are inadequate, that its financial condition and policies are 
unsafe or unsound, that its management is unfit, that insurance of its 
member accounts would otherwise involve undue risk to the fund, or 
that its powers and purposes are inconsistent with the promotion of 
thrift among its members and the creation of a source of credit for 
provident or productive purposes. 
"(d) If the application of a Federal credit union for insurance is 
rejected, the Administrator shall suspend or revoke its charter unless, 
within one year after the rejection, the credit union meets the require-
ments for insurance and becomes an insured credit union. 
" (e) Upon the approval of any application for insurance, the Admin- cer'tfrica'tes. 
istrator shall notify the applicant and shall issue to it a certificate 
evidencing the fact that it is, as of the date of issuance of the certificate, 
an insured credit union under the provisions of this title. 
"REPORTS OF CONDITION; CERTIFIED STATEMENTS; PREMIUMS FOR 
INSURANCE 
"SEC. 202. (a) (1) Each insured credit union shall make reports of 
condition to the Administrator upon dates which shall be selected by 
him. Such reports of condition shall be in such form and shall contain 
such information as the Administrator may require. The reporting 
dates selected for reports of condition shall be the same for all insured 
996 
PUBLIC LAW 91-468-OCT. 19, 1970 
L84 STAT. 
Penalty, 
73 Stat. 621 
Ante, p. 994. 
Annual certified 
statements. 
Premium, 
computation. 
credit unions except that when any of said reporting dates is a non-
business day for any credit union the preceding business day shall be 
its reporting date. The total amount of the member accounts of each 
insured credit union as of each reporting date shall be reported in such 
reports of condition in accordance with regulations prescribed by the 
Administrator. Each report of condition shall contain a declaration 
by the president, by a vice president, by the treasurer, or by any other 
officer designated by the board of directors of the reporting credit 
union to make such declaration, that the report is true and correct to 
the best of his knowledge and belief. Unless such requirement is 
waived by the Administrator, the correctness of each report of con-
dition shall be attested by the signatures of three of the officers of 
the reporting credit union with the declaration that the' report has 
been examined by them and to the best of their knowledge and belief 
is true and correct. 
"(2) The Administrator may call for such other reports as he may 
from time to time require. 
"(3) The Administrator may require reports of condition to be 
published in sfuch maimer, not inconsistent with any applicable law, 
as he may direct. Every insured credit union which willfully fails to 
make or publish any such report within ten days shall be subject to a 
penalty of not more than $100 for each day of such failure, recoverable 
by the Administrator for his use. 
"(4) The Administrator may accept any report of condition made 
to any commission, board, or authority having supervision of a State-
chartered credit union and may furnish to any such commission, board, 
or authority reports of condition made to the Administrator. 
"(5) Reports required under title I of this Act shall be so pre-
pared that they can be used for share insurance purposes. To the 
maximum extent feasible, the Administrator shall use for insurance 
purposes reports submitted to State regulatory agencies by State-
chartered credit unions. 
"(b) On or before January 31 of each insurance year, each 
insured credit union which became insured prior to the beginning of 
that year shall file with the Administrator a certified statement show-
ing tne total amount of the member accounts in the credit union at the 
close of the preceding insurance year and the amount of the premium 
charge for insurance due to the fund for that year, as computed under 
subsection (c) of this section. The certified statements required to be 
filed with the Administrator pursuant to this subsection shall be in 
such form and shall set forth such supporting information as the 
Administrator shall require. Each such statement shall be certified by 
the president of the credit union, or by any officer of the credit union 
designated by its board of directors, that to the best of his knowledge 
and belief the statement is true, correct, and complete and in accord-
ance with this title and regulations issued thereunder. 
"(c)(1) Except as provided in paragraphs (2) and (3) of this 
subsection, each insured credit union, on or before January 31 of each 
insurance year, shall pay to the fund a premium charge for insurance 
equal to one-twelfth of 1 per centum of the total amount of the 
member accounts in such credit union at the close of the preceding 
insurance year. 
"(2) Each credit union which was in existence prior to the enact-
ment of this title and which becomes insured under this title after 
January 1 of any insurance year shall pay to the fund, for the insurance 
year in which it becomes insured, a premium charge for insurance 
eiiual to one-twelfth of 1 per centum of the total amount of the member 
accounts in such credit union at the close of the month biefore the mpnth 
^ . , i — . - ^ - . 
- -—-
84 STAT. ] 
PUBLIC LAW 91-468-OCT. 19, 1970 
997 
in which it becomes insured, reduced by an amount proportionate to 
the number of calendar months elapsed since the beginning of such 
insurance year and prior to the month in which it becomes insured. 
Such payment shall be made within thirty days after the date on which 
the credit union receives the certificate of insurance issued to it under 
section 201 of this title. 
"(3) Each credit union which is chartered after enactment of this 
title and which becomes insured under this title in the insurance year 
in which it is chartered shall pay to the fund, for the insurance year 
in which it is chartered, a premium charge for insurance computed in 
the following manner: 
" (A) To the total amount of the member accounts in the credit 
union at the close of the month in which it becomes insured, add 
the total amount of such member accounts in the credit union at 
the close of each succeeding month of the insurance year and divide 
the total by the number of such months (including the month in 
which it iJecomes insured). 
"(B) From the figure obtained under subparagraph (A), sub-
tract $10,000. 
"(C) Multiply the figure obtained under subparagraph (B) by 
one-twelfth of 1 per centum. 
"(D) Reduce the figure obtained under subparagraph (C) by 
an amount proportionate to the number of calendar months 
elapsed since the beginning of such insurance year and prior to the 
month in which the credit union becomes insured. The figure 
obtained under this subparagraph is the amount of the premium 
charge for insurance due to the fund. Such premium charge shall 
be paid on or before January 31 of the insurance year following 
the year in which the credit union was chartered. 
" (4) When any loans to the fund from the Federal Government and 
the interest thereon have been repaid and the amount in the fund 
equals or exceeds the normal operating level, the Administrator may 
reduce the premium charge for insurance, but not below the amount 
necessary, in his judgment, to maintain the fund at the normal operat-
ing level. Any such reduction shall be effective only so long as the 
amount in the fund equals or exceeds the normal operating level and 
no loan to the fund from the Federal Government is outstanding. 
"(5) If in any year expenditures from the fund exceed the income 
of the fund, the Administrator may require each insured credit union 
to pay to the fund for such year, in addition to the regular premium 
charge for insurance payable under paragraph (1), (2), or (3) of this 
subsection, a special premium charge which shall not exceed an amount 
equal to the amount of the regular premium charge. 
"(6) (A) An insured credit union which is closed for liquidation cr^du'unlont 
because of insolvency or otherwise is entitled to a rebate of premiums premium rebate. 
paid bv it to the fund. Rebates shall be paid in accordance with regula-
tions prescribed by the Administrator, but no payment of rebate shall 
be made during any period in which 
"(i) a loan to the fund from the Federal Government is out-
standing ; or 
"(ii) the Administrator determines that the payment would 
unduly jeopardize the financial condition of the fund. 
A credit union otherwise entitled to a rebate of premiums shall 
not lose its entitlement because payment thereof cannot at any given 
time be made under the limitations prescribed in clause (i) or (ii). 
"(B) The amount of rebate of premiums to which a credit union is 
entitled under subparagraph (A) shall be computed as follows: To 
998 
PUBLIC LAW 91-468-OCT. 19, 1970 
[84 STAT. 
Noncompliance, 
penalty. 
Nonapplica-
bility. 
Premium pay-
ment, default, 
dividend restric-
tion. 
Nonapplica-
bility. 
Unpaid pre-
lum, recovery. 
the total amount of premiums paid to the fund by the credit union, 
plus interest on such payments at the average rate of interest earned 
by the fund on its assets during each of the years in which the pay-
ments were made; subtract the sum of 
"(i) the credit union's prorata share of the fund's administra-
tive expenses during the period in which the credit union had an 
insured status; 
"(ii) the credit union's prorata share of the net insurance pay-
ments (other than those referred to in clause (iii)) chargeable 
to the fund for claims arising during such period; and 
"(iii) the net insurance payments chargeable to the fund for 
claims arising in connection with the liquidation of the credit 
union. 
A credit union's prorata share of the fund's administrative expenses 
or net insurance payments for any year (or part thereof) shall be 
determined by dividing the total amount credited to member and non-
member accounts in the credit union at the end of such year (or part 
thereof), b;^ the total amount credited to all such accounts in all credit 
unions having an insured status at the end of such year (or part 
thereof). 
"(d) (1) Any insured credit union which fails to make any report 
of condition under subsection (a) of this section or to file any certified 
statement required to be filed by it in connection with determining 
the amount of any premium charge for insurance may be compelled 
to make such report or to file such statement by mandatory injunction 
or other appropriate remedy in a suit brought for such purpose by 
the Administrator against the credit union and any officer or officers 
thereof. Any such suit maj be brought in any court of the United 
States of competent jurisdiction in the district or territory in which 
the principal office of the credit union is located. 
"(2) Any insured credit union which willfully fails or refuses to 
file any certified statement or to pay any premium charge for insur-
ance required under this title shall be subject to a penalty of not 
more than $100 for each day that such violation continues, which 
penalty the Administrator may recover for his use. The provisions of 
this paragraph shall not be applicable in any case in which the refusal 
to pay the premium charge for insurance is due to a dispute between 
the insured credit union and the Administrator over the amount of 
the premium charge due to the fund if the credit union deposits 
security satisfactory to the Administrator for payment of the premium 
charge upon final determination of the issue. 
"(3) No insured credit union shall pay any dividends on its member 
accounts or distribute any of its assets while it remains in default in 
the payment of any premium charge for insurance due to the fund. 
Any director or officer of any insured credit union who knowingly 
participates in the declaration or payment of any such dividend or in 
any such distribution shall, upon conviction, be fined not more than 
$1,000 or imprisoned not more than one year, or both. The provisions of 
this paragraph shall not be applicable in any case in which the default 
is due to a dispute between the credit union and the Administrator over 
the amount of the premium charge due to the fund if the credit union 
deposits security satisfactory to the Administrator for payment of 
the premium charge upon final determination of the issue. 
"(e) The Administrator, in a suit brought at law or in equity 
in any court of competent jurisdiction, shall be entitled to recover 
from any insured credit union the amount of any unpaid premium 
charge for insurance lawfully payable by the credit union to the fund« 
whether or not such credit union shall have made any report of condi-
84 
STAT.] 
PUBLIC LAW 91-468-OCT. 19, 1970 
999 
tion under subsection (a) of this section or filed any certified statement 
required under subsection (b) of this section and whether or not suit 
shall have been brought to compel the credit union to make any such 
report or to file any such statement. No action or proceeding shall be 
brought for the recovery of any premium charge due to the fund, or 
for the recovery of any amount paid to the fund in excess of the amount 
due it, unless such action or proceeding shall have been brought within 
five jears after the right accrued for which the claim is made. Where 
the msured credit union has made or filed with the Administrator a 
false or fraudulent certified statement with the intent to evade, in 
whole or in part, the payment of any premium charge, the claim shall 
not be deemed to have accrued until the discovery by the Administra-
tor of the fact that the certified statement is false or fraudulent. 
"(f) Should any Federal credit union fail to make any report of 
condition under subsection (a) of this section or to file any certified 
statement required to be filed under subsection (b) of this section or to 
pay any premium charge for insurance required to be paid under any 
provision of this title, and should the credit union fail to correct such 
failure within thirty days after written notice has been given by the 
Administrator to an officer of the credit union, citing this subsection 
aaid stating that the credit union has failed to make any such report 
or file any such statement or pay any such premium charge as required 
by law, all the rights, privileges, and franchises of the credit union 
granted to it under title I of this Act shall be thereby forfeited. 
Whether or not the penalty provided in this subsection has been 
incurred shall be determined and adjudged by any court of the United 
States of competent jurisdiction in a suit brought for that purpose 
in the district or territory in which the principal office of such credit 
union is located, under direction of and by the Administrator in his 
own name, before the credit union shall be declared dissolved. The 
remedies provided in this subsection and in subsections (d) and (e) 
of this section shall not be construed as limiting any other remedies 
against any insured credit union but shall be in addition thereto. 
"(g) Each insured credit union shall maintain such records as will 
readily permit verification of the correctness of its reports of condi-
tion, certified statements, and premium charges for insurance. How-
ever, no insured credit union shall be required to retain such records 
for such purpose for a period in excess of five years from the date of 
the making of any such report, the filing of any such statement, or the 
payment of any premium charge, except that when there is a dis-
pute between the insured credit union and the Administrator over the 
amount of any premium charge for insurance the credit union shall 
retain such records until final determination of the issue. 
"(h) For the purposes of this section— 
"(1) the term 'insurance year' means the period beginning on 
January 1 and ending on the following December 31, both dates 
inclusive; and 
"(2) the term 'normal operating level,' when applied to the 
Fund, means an amount equal to 1 per centum of the aggregate 
amount of the member accounts in all insured credit unions. 
Ante, p. 995. 
Noncompliance, 
penalty. 
Ante, p. 994. 
Records. 
"Insurance 
year." 
••Normal 
operating level. 
"NATIONAL CREDIT U N I O N SHARE INSURANCE 
F U N D 
"SEC. 203. (a) There is hereby created in the Treasury of the 
United States a National Credit Union Share Insurance Fund which 
shall be used by the Administrator as a revolving fund for carrying 
out the purposes of this title. Money in the fund shall be available upon 
47-348 O - 72 - 67 (Pt. 1) 
1000 
PUBLIC LAW 91-468-OCT. 19, 1970 
[84 STAT. 
Investment 
authorization. 
Loans to fund, 
limitation and 
terms< 
Interest 
accrual. 
Interest rate. 
40 Stat. 288. 
31 u s e 774. 
requisition by the Administrator, without fiscal year limitation, for 
making payments of insurance under section 207 of this title, for pro-
viding assistance and making expenditures under section 208 of this 
title in connection with the liquidation or threatened liquidation of 
insured credit unions, and for such administrative and other expenses 
incurred in carrying out the purposes of this title as he may determine 
to be proper. 
"(b) AH premium charges for insurance paid pursuant to the pro-
visions of section 202 of this title and all fees for examinations and all 
penalties collected by the Administrator under any provision of this 
title shall be deposited in the National Credit Union Share Insurance 
Fund. 
" (c) The Administrator may authorize the Secretary of the Treasury 
to invest and reinvest such portions of the fund as the Administrator 
may determine are not needed for current operations in any interest-
bearing securities of the United States or in any securities guaranteed 
as to both principal and interest by the L^nited States or in bonds or 
other obligations which are lawful investments for fiduciary, trust, 
and public funds of the United States, and the income therefrom shall 
constitute a part of the fund. 
"(d) (1) If, in the judgment of the Administrator, a loan to the 
fund is required at any time for carrying out the purposes of this 
title, the Secretary of the Treasury shall make the loan, but loans under 
this paragraph shall not exceed in the aggregate $100,000,000 out-
standing at any one time. Except as otherwise provided in this sub-
section and in subsection (e) of this section, each loan under this 
paragraph shall be made on such terms as may be fixed by agreement 
between the Administrator and the Secretary of the Treasury. 
"(2) Interest shall accrue to the Treasury on the amount of any 
outstanding loans made to the fund pursuant to paragraph (1) of 
this subsection on the basis of the average daily amount of such out-
standing loans determined at the close of each nscal year with respect 
to such year, and the Administrator shall pay the interest so accruing 
into the Treasury as miscellaneous receipts annually from the fund. 
The Secretary of the Treasury shall determine the applicable interest 
rate in advance by calculating the average yield to maturity (on the 
basis of daily closing market bid quotations during the month of June 
of the preceding fiscal year) on outstanding marketable public debt 
obligations of the United States having a maturity date of five or 
less years from the first day of such month of June and by adjusting 
such yield to the nearest one-eighth of 1 per centum. 
"(3) For the purpose of making loans under paragraph (1) of 
this subsection, the Secretary of the Treasury is authorized to use 
as a public debt transaction the proceeds of the sale of any securities 
issued under the Second Liberty Bond Act, as amended, and the 
purposes for which securities may be issued under the Second Liberty 
Bond Act, as amended, are hereby extended to include such loans. 
All loans and repayments under this section shall be treated as public 
debt transactions of the United States. 
"(e) So long as any loans to the fund are outstanding, the Admin-
istrator shall from time to time, not less often than annually, determine 
whether the balance in the fund is in excess of the amount which, in 
his judgment, is needed to meet the requirements of the fund and 
shall pay such excess to the Secretary of the Treasury, to be credited 
against the loans to the fund. 
- <:• - o f'S-K-n 
84 STAT. ] 
PUBLIC LAW 91-468-OCT. 19, 1970 
1001 
"EXAMINATION OF INSURED CRM)IT UNIONS 
"SEC. 204. (a) The Administrator shall appoint examiners who shall 
have power, on his behalf, to examine any insured credit union, any 
credit union making application for insurance of its member 
accounts, or any closed insured credit union whenever in the 
judgment of the Administrator an examination is necessary to deter-
mine the condition of any such credit union for insurance purposes. 
Each examiner shall have power to make a thorough examination of 
all of the affairs of the credit union and shall make a full and detailed 
report of the condition of the credit union to the Administrator. The 
Administrator in like manner shall appoint claim agents who shall 
have power to investigate and examine all claims for insured member 
accounts. Each claim agent shall have power to administer oaths 
and affirmations, to examine and to take and preserve testimony under 
oath as to any matter in respect to claims for insured accounts, and to 
issue subpenas and subpenas duces tecum and, for the enforcement 
thereof, to apply to the United States district court for the judicial 
district or the United States court in any territory in which the prin-
cipal office of the credit union is located or in which the witness resides 
or carries on business. Such courts shall have jurisdiction and power 
to order and require compliance with any such subpena. 
"(b) In connection with examinations of insured credit unions, the 
Administrator, or his designated representatives, shall have power to 
administer oaths and affinnations, to examine and to take and preserve 
testimony under oath as to any matter in respect of the affairs of any 
such credit union, and to issue subpenas and subpenas duces tecum and, 
for the enforcement thereof, to apply to the United States district court 
for the judicial district or the United States court in any territory in 
which the principal office of the credit union is located or in which the 
witness resides or carries on business. Such courts shall have jurisdic-
tion and power to order and require compliance with any such subpena, 
"(c) In cases of refusal to obey a subpena issued to, or contumacy 
by, any person, the Administrator may invoke the aid of any court 
of the United States within the jurisdiction of which such hearing, 
examination, or investigation is carried on, or where such person resides 
or carries on business, in requiring the attendance and testimony 
of witnesses and the production of books, records, or other papers. 
Such Qjonrt may issue an order requiring such person to appear before 
the Administrator, or before a person designated by him, there to pro-
duce records, if so ordered, or to give testimony touching the matter in 
question. Any failure to obey such order of the court may be punished 
by such court as a contempt thereof. All process in any such case may 
be served in the judicial district whereof such person is an inhabitant 
or carries on business or wherever he may be found. No person shall 
be excused from attending and testifying or from producing books, 
records, or other papers in obedience to a subpena issued under the 
authority of this title on the ground that the testimony or evidence, 
documentary or otherwise, required of him may tend to incriminate 
him or subject him to penalty or forfeiture, but no individual shall be 
prosecuted or subject to any penalty or forfeiture for or on account of 
any transaction, matter, or thing concerning which he is compelled to 
testify or produce evidence, documentary or otherwise, after having 
claimed his privilege against self-incrimination, except that such in-
dividual so testifying shall not be exempt from prosecution and pun-
ishment for perjury committed in so testifying. 
"(d) The Administration may accept any report of examination 
made by or to any commission, board, or authority having supervision 
of a State-chartered credit union and may furnish to any such com-
mission, board, or authority reports of examination made on behalf 
of the Administrator. 
Examiners and 
claim agents, 
powers. 
Report by 
examiner. 
Privilege 
against self-
incrimination. 
1002 
PUBLIC LAW 91-468-OCT. 19, 1970 
[84 STAT. 
Insured status, 
advertisement. 
Restrictions. 
Penalty. 
Security 
standards. 
"REQUIREMENTS GOVERNING INSURED CREDIT UNIONS 
"SEC, 205. (a) Every insured credit union shall display at each 
place of business maintained by it a sign or signs indicating that its 
member accounts are insured by the Administrator and shall include 
in all of its advertisements a statement to the effect that its member 
accounts are insured by the Administrator. The Administrator may 
exempt from this requirement advertisements which do not relate to 
member accounts or advertisements in which it is impractical to include 
such a statement. The Administrator shall prescribe by regulation the 
forms of such signs, the manner of display, the substance of any such 
statement, and the manner of use. 
"(b) (1) Except with the prior written approval of the Adminis-
trator, no insured credit union shall— 
" (A) merge or consolidate with any noninsured credit union or 
institution; 
"(B) assume liability to pay any member accounts in, or 
similar liabilities of, any noninsured credit union or institution; 
"(C) transfer assets to any noninsured credit union or insti-
tution in consideration of the assumption of liabilities for any 
portion of the member accounts in such insured credit union; or 
"(D) convert into a noninsured credit union or institution. 
"(2) Except with the prior written approval of the Administrator, 
no insured credit union shall merge or consolidate with any other in-
sured credit union or, either directly or indirectly, acquire the assets 
of, or assume liability to pay any member accounts in, any other 
insured credit union. 
"(c) In granting or withholding approval or consent under sub-
section (b) of this section, the Administrator shall consider— 
"(1) the history, financial condition, and management policies 
of the credit union; 
"(2) the adequacy of the credit union's reserves; 
"(3) the economic advisability of the transaction; 
"(4) the general character and fitness of the credit union's 
management; 
"(5) the convenience and needs of the members to be served 
by the credit union; and 
"(6) whether the credit union is a cooperative association 
organized for the purpose of promoting thrift among its members 
and creating a source of credit for provident or productive 
purposes. 
"(d) Except with the written consent of the Administrator, no 
person shall serve as a director, officer, committee member, or ein-
ployee of an insured credit union who has been convicted, or who is 
hereafter convicted, of any criminal offense involving dishonesty or 
a breach of trust. For each willful violation of this prohibition, the 
credit union involved shall be subject to a penalty of not more than 
$100 for each day this prohibition is violated, which the Administrator 
may recover for his use. 
"(e)(1) The Administrator shall promulgate rules establishing 
minimum standards with which each insured credit union must com-
ply with respect to the installation, maintenance, and operation of 
security devices and procedures, reasonable in cost, to discourage 
robberies, burglaries, and larcenies and to assist in the identification 
and apprehension of persons who commit such acts. 
"(2) The rules shall establish the time limits within which insured 
credit unions shall comply with the standards and shall require the 
84 STAT. ] 
PUBLIC LAW 91-468-OCT. 19, 1970 
1003 
submission of periodic reports with respect to the installation, main-
tenance, and operation of security devices and procedures. 
"(3) An insured credit union which violates a rule promulgated 
pursuant to this subsection shall be subject to a civil penalty w'hich 
shall not exceed $100 for each day of the violation. 
Penalty, 
"TERMINATION OF INSURANCE; CEASE-AND-DESIST PROCEEDINGS; SUSPEN-
SION 
AND/OR 
REMOVAL OF DIRECTORS, 
OFFICERS, 
AND COMMITTEE 
MEMBERS 
"SEC. 206. (a) Any insured credit union other than a Federal credit 
union may, upon not less than ninety days' written notice to the 
Administrator and upon the affirmative vote of a majority of its mem-
bers within one year prior to the giving of such notice, terminate its 
status as an insured credit union. 
"(b)(1) Whenever, in the opinion of the Administrator, any 
insured credit union is engaging or has engaged in unsafe or unsound 
practices in conducting the business of such credit union, or is in an 
unsafe or unsound condition to continue operations as an insured 
credit union, or is violating or has violated an applicable law, rule, 
regulation, order, or any condition imposed in writing by the Admin-
istrator in connection with the granting of any application or other 
request by the credit union, or is violating or has violated anj written 
agreement entered into with the Administrator, the Administrator 
shall serve upon the credit union a statement with respect to such 
practices or conditions or violations for the purpose of securing the 
correction thereof. In the case of an insured State-chartered credit 
union, the Administrator shall send a copy of such statement to the 
commission, board, or authority, if any, having supervision of such 
credit union. Unless such correction shall be made within one hundred 
and twenty days after service of such statement, or within such shorter 
period of not less than twenty days after such service as the Adminis-
trator shall require in any case where he determines that the insurance 
risk with respect to such credit union could be unduly jeopardized by 
further delay in the correction of such practices or conditions or viola-
tions, or as the commission, board, or authority having supervision of 
such credit union, if any, shall require in the case of an insured State-
chartered credit union, the Administrator, if he shall determine to 
proceed further, shall give to the credit union not less than thirty 
days' written notice of his intention to terminate the status of the 
credit union as an insured credit union. Such notice shall contain a 
statement of the facts constituting the alleged unsafe and unsound 
practices or conditions or violations and shall fix a time and place for a 
hearing thereon. Such hearing shall be fixed for a date not earlier than 
thirty days nor later than sixty days after service of such notice unless 
an earlier or a later date is set by the Administrator at the request of 
the credit union. Unless the credit union shall appear at the hearing by 
a duly authorized representative, it shall be deemed to have consented 
to the termination of its status as an insured credit union. In the event 
of such consent, or if upon the record made at any such hearing the 
Administrator shall find that any unsafe or unsound practice or con-
dition or violation specified in the notice has been estatslished and has 
not been corrected within the time above-prescribed in which to make 
such correction, the Administrator may issue and serve upon the credit 
union an order terminating its status as an insured credit union on a 
date subsequent to the date of such finding and subsequent to the 
expiration of the time specified in the notice. 
Notice. 
Hearing. 
1004 
PUBLIC LAW 91-468-OCT. 19, 1970 
[84 STAT. 
Judicial 
review. 
Notice to 
members. 
Insurance, 
tinuation for 
year. 
con-
one 
Notice. 
Hearing. 
" (2) Any credit union Avhose insured status has been terminated by 
order of the Administrator under this subsection shall have the right 
of judicial review of such order only to the same extent as provided for 
the review of orders under subsection (i) of this section. 
"(c) In the event of the termination of a credit union's status as an 
insured credit union as provided under subsection (a) or (b) of this 
section, the credit union shall give prompt and reasonable notice to all 
of its members whose accounts are insured that it has ceased to be an 
insured credit union. It may include in such notice a statement of the 
fact that member accounts insured on the effective date of such termi-
nation, to the extent not withdrawn, remain insured for one year from 
the date of such termination, but it shall not further represent itself 
in any manner as an insured credit union. In the event of failure to 
give the notice as herein provided to members whose accounts are 
insured, the Administrator is authorized to give reasonable notice. 
"(d) After the termination of the insured status of any credit union 
as provided under subsection (a) or (b) of this section, insurance of 
its member accounts to the extent that they were insured on the effec-
tive date of such termination, less any amounts thereafter withdrawn 
which reduce the accounts below the amount covered by insurance 
on the effective date of such tennination, shall continue for a period 
of one year, but no shares issued by the credit union or deposits made 
after the date of such termination shall be insured by the Adminis-
trator. The credit union shall continue to pay premiums to the Admin-
istrator during such period as in the case of an insured credit union 
and the Administrator shall have the right to examine such credit 
union from time to time during the period during which such insurance 
continues. Such credit union shall, in all other respects, be subject to 
the duties and obligations of an insured credit union for the period 
of one year from the date of such termination. In the event that such 
credit union shall be closed for liquidation within such period of one 
year, the Administrator shall have the same powers and rights with 
respect to such credit union as in the case of an insured credit union. 
"(e) (1) If, in the opinion of the Administrator, any insured credit 
union or any credit union any of the member accounts of which are 
insured is engaging or has engaged, or the Administrator has reason-
able cause to believe that the credit union is about to engage, in an 
unsafe or unsound practice in conducting the business of such credit 
union, or is violating or has violated, or the Administrator has rea-
sonable cause to believe that the credit union is about to violate, a 
law, rule, or regulation, or any condition imposed in writing by the 
Administrator in connection with the granting of any application or 
other request by the credit union, or any written agreement entered 
into with the Administrator, the Administrator may issue and serve 
upon the credit union a notice of charges in respect thereof, the notice 
sliall contain a statement of the facts constituting the alleged unsafe 
or unsound practice or practices or violation or violations and shall 
fix a time and place at which a hearing will be held to determine 
whether an order to cease and desist therefrom should issue against 
the credit union. Such hearing shall be fixed for a date not earlier 
than thirty days nor later than sixty days after service of such notice 
unless an earlier or a later date is set by the Administrator at the 
request of the credit union. Unless the credit union shall appear at the 
hearing by a duly authorized representative, it shall be deemed to have 
consented to the issuance of the cease-and-desist order. In the event 
of such consent, or if upon the record made at any such hearing the 
Administrator shall find that any unsafe or unsound practice or viola-
84 STAT.] 
PUBLIC LAW 91-468-OCT. 19, 1970 
1005 
tion specified in the notice of charges has been established, the Admin-
istrator may issue and serve upon the credit union an order to cease 
and desist from any such practice or violation. Such order may, b j 
provisions which may be mandatory or otherwise, require the credit 
union and its directors, officers, committee members, employees, and 
agents to cease and desist from the same and, further, to take affirma-
tive action to correct the conditions resulting from any such practice 
or violation. 
"(2) A cease-and-desist order shall become effective at the expira-
tion of thirty days after service of such order upon the credit union 
concerned (except in the case of a cease-and-desist order issued upon 
consent, which shall become effective at the time specified therein) and 
shall remain effective and enforceable except to such extent as it is 
stayed, modifid, terminated, or set aside by action of the Administrator 
or a reviewing court. 
"(f)(1) Whenever the Administrator shall determine that the 
unsafe or unsound practice or practices or violation or threatened viola-
tion specified in the notice of charges served upon the credit union 
pursuant to subsection (e)(1) of this section, or the continuation 
thereof, is likely to cause insolvency or substantial dissipation of assets 
or earnings of the credit union, or is likely to otherwise seriously 
prejudice the interests of its insured members, the Administrator may 
issue a temporary order requiring the credit union to cease and desist 
from any such practice or violation. Such order shall become effective 
upon service upon the credit union and, unless set aside, limited, or 
suspended by a court in proceedings authorized by paragraph (2) of 
this subsection, shall remain effective and enforceable pending the 
completion of the administrative proceedings pursuant to such notice 
and until such time as the Administrator shall dismiss the charges 
specified in such notice or, if a cease-and-desist order is issued against 
the credit union, until the effective date of any such order, 
"(2) Within ten days after the credit union concerned has been 
served with a temporary cease-and-desist order, the credit union may 
apply to the United States district court for the judicial district in 
which the principal office of the credit union is located, or the United 
States District Court for the District of Columbia, for an injunction 
setting aside, limiting, or suspending the enforcement, operation, or 
effectiveness of such order pending the completion of the administrative 
proceedings pursuant to the notice of charges served upon the credit 
union under subsection (e) (1) of this section, and such court shall 
have jurisdiction to issue such injunction. 
" (3) In the case of violation or threatened violation of, or failure to 
obey, a temporary cease-and-desist order, the Administrator may apply 
to the United States district court, or the United States court of any 
territory, within the jurisdiction of which the principal office of the 
credit union is located for an injunction to enforce such order, and, if 
the court shall determine that there has been such violation or threat-
ened violation or failure to obey, it shall be the duty of the court to 
issue such injunction. 
"(g)(1) Whenever, in the opinion of the Administrator, any 
director, officer, or committee member of an insured credit union has 
committed any violation of law, rule, or regulation, or of a cease-and-
desist order which has become final, or has engaged or participated in 
any unsafe or unsound practice in connection with the credit union, or 
has committed or engaged in any act, omission, or practice which con-
stitutes a breach of his fiduciary duty as such director, officer, or com-
mittee member and the Administrator determines that the credit union 
Temporary 
cease-and-desist 
order. 
Injunctive 
procedure. 
Director, 
officer, committee 
member, removal. 
1006 
PUBLIC LAW 91.468-OCT. 19, 1970 
[84 STAT. 
has suffered or will probably suffer substantial financial loss or other 
damage or that the interests of its insured members could be seriously 
prejudiced by reason of such violation or practice or breach of fiduciary 
duty and that such violation or practice or breach of fiduciary duty is 
one involving personal dishonesty on the part of such director, officer, 
Notice. 
or committee member, the Administrator may serve upon such director, 
officer, or committee member a written notice of his intention to 
remove him from office. 
"(2) Whenever, in the opinion of the Administrator, any director, 
officer, or committee member of an insured credit union, by conduct or 
practice with respect to another insured credit union or other business 
institution which resulted in substantial financial loss or other damagfe, 
has evidenced his personal dishonesty and unfitness to continue as a 
director, officer, or committee member, and, whenever, in the opinion 
of the Administrator, any other person participating in the conduct of 
the affairs of an insured credit union, by conduct or practice with 
respect to such credit union or other insured credit union or other 
business institution which resulted in substantial financial loss or other 
damage, has evidenced his personal dishonesty and unfitness to partici-
pate in the conduct of the affairs of such insured credit union, the 
Administrator may serve upon such director, officer, committee mem-
ber, or other person a written notice of his intention to remove him 
from office and/or to prohibit his further participation in any manner 
in the conduct of the affairs of such credit union. 
"(3) In respect to any director, officer, or committee member of an 
insured credit union or any other person referred to in paragraph (1) 
or (2) of this subsection, the Administrator may, if he deems it neces-
sary for the protection of the credit union or the interests of its insured 
members, by written notice to such effect served upon such director, 
officer, committee member, or other person, suspend him from office 
and/or prohibit him from further participation in any manner in the 
conduct of the affairs of the credit union. Such suspension and/or 
prohibition shall become effective upon service of such notice and, 
unless stayed by a court in proceedings authorized by paragraph (5) 
of this subsection, shall remain in effect pending the completion of the 
administrative proceedings pursuant to the notice served under para-
graph (1) or (2) of this subsection and until such time as the 
Administrator shall dismiss the charges specified in such notice or, 
if an order of removal and/or prohibition is issued against the director, 
officer, committee member, or other person, until the effective date of 
any such order. Copies of any such notice shall also be served upon the 
credit union of which he is a director, officer, or committee member or 
in the conduct of whose affairs he has participated. 
Hearing. 
"(4) A notice of intention to remove a director, officer, committee 
member, or other person from office and/or to prohibit his participation 
in the conduct of the affairs of an insured credit union shall contain 
a statement of the facts constituting the grounds therefor and shall 
fix a time and place at which a hearing will be held thereon. Such 
hearing shall be fixed for a date not earlier than thirty days nor later 
than sixty days after the date of service of such notice unless an earlier 
or a later date is set by the Administrator at the request of such director, 
officer, committee member, or other person, and for good cause shown, 
or at the request of the Attorney General of the United States. Unless 
such director, officer, committee member, or other person shall appear 
at the hearing in person or by a duly authorized representative, he 
shall be deemed to have consented to the issuance of an order of such 
removal and/or prohibition. In the event of such consent, or if upon 
the record made at any such hearing the Administrator shall find that 
any of the grounds specified in such notice has been established, the 
84 STAT. ] 
PUBLIC LAW 91-468-OCT. 19, 1970 
1007 
Administrator may issue such orders of suspension or removal from 
office and/or prohibition from participation in the conduct of the 
affairs of the credit union as he may deem appropriate. Any such order 
shall become effective at the exj)iration of thirty days after service 
upon such credit union and the director, officer, committee member, or 
other person concerned (except in the case of an order issued upon con-
sent, which shall become effective at the time specified therein). Such 
order shall remain effective and enforceable except to such extent as it 
is stayed, modified, terminated, or set aside by action of the Admin-
istrator or a reviewing court. 
" (5) Within ten days after any director, officer, committee member, 
or other person has been suspended from office and/or prohibited from 
participation in the conduct of the affairs of an insured credit union 
under paragraph (3) of this subsection, such director, officer, com-
mittee member, or other person may apply to the United States district 
court for the judicial district in which the principal office of the credit 
union is located, or the United States District Court for the District 
of Columbia^ for a stay of such suspension and/or prohibition pending 
the completion of the administrative proceedings pursuant to the 
notice served upon such director, officer, committee member, or other 
person under paragraph (1) or (2) of this subsection, and such court 
shall have jurisdiction to stay such suspension and/or prohibition. 
"(h)(1) Whenever any director, officer, or committee member of 
Notice. 
an insured credit union, or other person participating in the conduct 
of the affairs of such credit union, is charged in any complaint author-
ized by a United States attorney or in any information or indictment, 
with the commission of or participation m a felony involving dishon-
esty or breach of trust, the Administrator may, by written notice 
served upon such director, officer, committee member, or other person, 
suspend him from office and/or prohibit him from further participa-
tion in any manner in the conduct of the affairs of the credit union. A 
copy of such notice shall also be served upon the credit union. Such 
suspension and/or prohibition shall remain in effect until such 
information, indictment, or complaint is finally disposed of or until 
terminated by the Administrator. In the event that a judgment of 
conviction with respect to such offense is entered against such director, 
officer, committee member, or other person, and at such time as such 
judgment is not subject to further appellate review, the Administrator 
may issue and serve upon such director, officer, committee member, or 
other person an order removing him from office and/or prohibiting 
him from further participation in any manner in the conduct of the 
affairs of the credit union except with the consent of the Adminis-
trator. A copy of such order shall also be served upon such credit 
union, whereupon such director, officer, or committee member shall 
cease to be a director, officer, or committee member of such institution. 
A finding of not guilty or other disposition of the charge shall not pre-
clude the Administrator from thereafter instituting proceedings to 
remove such director, officer, committee member, or other person from 
office and/or to prohibit further participation in the affairs of the 
credit union pursuant to paragraph (1) or (2) of subsection (g) of 
this section. 
" (2) If at any time, because of the suspension of one or more direc-
tors pursuant to this section, there shall be on the board of directors of 
a Federal credit union less than a quorum of directors not so suspended, 
all powers and functions vested in or exercisable by such board shall 
vest in and be exercisable by the director or directors on the board 
not so suspended, until such time as there shall be a quorum of the 
board of directors. In the event all of the directors of a Federal credit 
1008 
PUBLIC LAW 91-468-OCT. 19, 1970 
[84 STAT. 
Temporary 
directors, appoint-
ment. 
Jurisdiction. 
80 Stat, 380; 
!1 Stat, 195, 
5 u s e 500. 
Judicial review. 
72 Stat. 941; 
80 Stat. 1323. 
80 Stat. 392. 
5 u s e 701. 
62 Stat. 928. 
union are suspended pursuant to this section, the Administrator shall 
appoint persons to serve temporarily as directors in their place and 
stead pending the termination of such suspensions, or until such time 
as those who have been suspended cease to be directors of the credit 
union and their respective successors have been elected by the members 
at an annual or special meeting and have taken office. Directors 
appointed temporarily by the Administrator shall, within thirty 
days following their appointment, call a special meeting for the elec-
tion of new directors, unless during the thirty-day period (A] the 
regular annual meeting is scheduled, or (B) the suspensions giving 
rise to the appointment of temporary directors are terminated. 
"(i) (1) Any hearing provided for in this section shall be held in 
the Federal judicial district or in the territory in which the principal 
office of the credit union is located, unless the party afforded the hear-
ing consents to another place, and shall be conducted in accordance 
with the provisions of chapter 5 of title 5 of the United States Ck)de. 
Such hearing shall be private unless the Administrator, in his discre-
tion, after fully considering the views of the party afforded the hear-
ing, determines that a public hearing is necessary to protect the 
public interest. After such hearingj and within ninety days after the 
Administrator has notified the parties that the case has been submitted 
to him for final decision, he shall render his decision (which shall 
include findings of fact upon which his decision is predicated) and 
shall issue and serve upon each party to the proceeding an order or 
orders consistent with the provisions of this section. Judicial review 
of any such order shall be exclusively as provided in this subsection (i). 
Unless a petition for review is timely filed in a court of appeals of the 
United States, as provided in paragraph (2) of this subsection, and 
thereafter until the record in the proceeding has been filed as so pro-
vided, the Administrator may at any time, upon such notice and in 
such manner as he may deem proper, modify, terminate, or set aside 
any such order. Upon such filing of the record, the Administrator 
may modify, terminate, or set aside any such order with permission 
of the court. 
*'(2) Any party to the proceeding, or any person required by an 
order issued under this section to cease and desist from any of the 
practices or violations stated therein, may obtain a review of any 
order served pursuant to paragraph (1) of this subsection (other than 
an order issued with the consent of the credit union or the director, 
officer, committee member, or other person concerned or an order 
issued under subsection (h) of this section) by filing in the court of 
appeals of the United States for the circuit m which the principal 
office of the credit union is located, or in the United States Court of 
Appeals for the District of Columbia Circuit, within thirty days after 
the date of service of such order, a written petition praying that the 
order of the Administrator be modified, terminated, or set aside. A 
copy of such petition shall be forthwith transmitted by the clerk of 
the court to the Administrator, and thereupon the Administrator shall 
file in the court the record in the proceeding, as provided in section 
2112 of title 28, United States Code. Upon the filing of such petition, 
such court shall have jurisdiction, which upon the filing of the record 
shall, except as provided in the last sentence of said paragraph (1), 
be exclusive, to affirm, modify, terminate, or set aside, in whole or in 
part, the order of the Administrator. Review of such proceedings shall 
be had as provided in chapter 7 of title 5, United States Code. The 
judgment and decree of the court shall be final, except that the same 
shall be subject to review by the Supreme Court upon certiorari, as 
provided in section 1254 of title 28, United States Code. 
84 STAT.] 
PUBLIC LAW 91-468-OCT. 19, 1970 
1009 
"(3) The commencement of proceedings for judicial review under 
paragraph (2) of this subsection shall not, unless specifically ordered 
by the court, operate as a stay of any order issued by the 
Administrator. 
"(j) The Administrator may in his discretion apply to the L^nited 
States district court, or the United States court of any territory within 
the jurisdiction of which the principal office of the credit union is 
located, for the enforcement of any effective and outstanding notice 
or order issued imder this section, and such courts shall have juris-
diction and power to order and require compliance therewith. How-
ever, except as otherwise provided in this section, no court shall have 
jurisdiction to affect by injunction or otherwise the issuance or 
enforcement of any notice or order under this section or to review, 
modify, suspend, terminate, or set aside any such notice or order. 
" (k) Any director, officer, or committee member, or former director, 
officer, or committee member, of an insured credit union or of a credit 
union any of the member accounts of which are insured, or any other 
person against w^hom there is outstanding and effective any notice or 
order (which is an order which has become final) served upon such 
director, officer, committee member, or other person under subsections 
(g)(3), (g)(4), or (h) of this section and who (i) participates in 
any manner in the conduct of the affairs of the credit union involved, 
or directly or indirectly solicits or procures, or transfers or attempts 
to transfer, or votes or attempts to vote, any proxies, consents, or 
authorizations in respect of any voting rights in such credit union, or 
(ii) without the prior written approval of the Administrator votes 
for a director, serves or acts as a director, officer, committee member, 
or employee of any credit union, shall upon conviction be fined not 
more than $5,000 or imprisoned for not more than one year, or both. 
"(1) As used in this section (1) the t«rms 'cease-and-desist order 
which has become final' and 'order which has become final' means a 
cease-and-desist order, or an order issued by the Administrator with 
the consent of the credit union or the director, officer, committee mem-
ber, or other person concerned, or with respect to which no petition for 
review of the action of the Administrator has been filed and perfected 
in a court of appeals as specified in paragraph (2) of subsection (i) of 
this section, or with respect to which the action of the court in which 
said petition is so filed is not subject to further review by the Supreme 
Court of the United States in proceedings provided for in said para-
graph, or an order issued under subsection (h) of this section, and (2) 
the term 'violation' includes without limitation any action (alone or 
with another or others) for or toward causing, bringing al)out, partici-
pating in, counseling, or aiding or abetting a violation. 
" (m) Any service, required or authorized to be made by the Admin-
istrator under this section may be made by registered mail or in such 
other manner reasonably calculated to give actual notice as the Admin-
istrator may by regulation or otherwise provide. Copies of any notice 
or order served by the Administrator upon any State-chartered credit 
union or any director, officer, or committee member thereof or other 
person participating in the conduct of its affairs, pursuant to the pro-
visions of this section, shall also be sent to the commission, board, or 
authority, if any, having supervision of such credit union. 
"(n) In connection with any proceeding under subsection (e), (f) 
(1), or (g) of this section involving an insured State-chartered credit 
union or any director, officer, committee member, or other person 
participating in the conduct of its affairs, the Administrator shall 
provide the commission, board, or authority, if any, having supervision 
of such credit union, with notice of his intent to institute such a pro-
Jurisdiction. 
Penalty. 
Definitions. 
1010 
PUBLIC LAW 91-468-OCT. 19, 1970 
[84 STAT. 
Proce 
powers 
istrator, 
edings, 
of Admin-
ceeding and the grounds thereof. Unless within such time as the 
Administrator deems appropriate in the light of the circumstances of 
the case (which time must be specified in the notice prescribed in the 
preceding sentence) satisfactory corrective action is effectuated by 
action of such commission, board, or authority, the Administrator may 
proceed as provided in this section. No credit union or other party who 
is the subject of any notice or order issued by the Administrator under 
this section shall have standing to raise the requirements of this subsec-
tion as ground for attacking the validity of any such notice or order, 
"(o) In the course of or m connection with any proceeding under 
this section, the Administrator, or any designated representative 
thereof, including any person designat^ed to conduct any hearing under 
this section, shall have the power to administer oaths and affirmations, 
to take or cause to be taken depositions, and to issue, revoke, quash, or 
modify subpenas and subpenas duces tecum, and the Administrator is 
empowered to make rules and regulations with respect to any such 
proceedings. The attendance of witnesses and the production of docu-
ments provided for in this subsection may be required from any place 
in any State or in any territory or other place subject to the jurisdiction 
of the United States at any designated place where such proceeding is 
being conducted. Any party to proceedings under this section may 
apply to the United States District Court for the District of Columbia, 
or the United States district court for the judicial district or the 
United States court in any territory in which such proceeding is being 
conducted, or where the witness resides or carries on business, for en-
forcement of any subpena or subpena duces tecum issued pursuant to 
this subsection, and such courts shall have jurisdiction and power to 
order and require compliance therewith. Witnesses subpenaed under 
this section shall be paid the same fees and mileage that are paid wit-
nesses in the district courts of the United States. Any court having 
jurisdiction of any proceeding instituted under this section by an in-
sured credit union or a director, officer, or committee member thereof 
may allow to any such party such reasonable expenses and attorneys' 
fees as it deems just and proper, and such expenses and fees shall be 
paid by the credit union or from its assets. 
Liquidation. 
Claims. 
"PAYMENT OF INSURANCE 
"SEC. 207. (a) (1) Upon his finding that a Federal credit union 
insured under this title is bankrupt or insolvent, the Administrator 
shall close such credit union for liquidation and appoint himself 
liquidating agent therefor. 
"(2) Notwithstanding any other provision of law, it shall be the 
duty of the Administrator as such liquidating agent to cause notice to 
be given, by advertisement in such newspapers as he may direct, to 
all persons having claims against such closed credit union, to present 
their claims within four months from the date such advertisement 
first appeared; to realize upon the assets of such closed credit union, 
having due regard to the condition of credit in the locality; and to 
wind up the affairs of such closed credit union in conformity with the 
provisions of law relating to the liquidation of bankrupt or insolvent 
Federal credit unions, except as herein otherwise provided. The Ad-
ministrator as such liquidating agent shall pay to himself for his own 
account such portion of the amounts realized from such liquidation as 
he shall be entitled to receive on account of his subrogation to the 
claims of members, and he shall pay to members and other creditors 
84 STAT. ] 
PUBLIC LAW 91-468-OCT. 19, 1970 
1011 
the net amounts available for distribution to them. The Administrator ^^^^^'^^'^^ ^^^" 
as such liquidating agent, however, may, in his discretion, pay divi-
dends on proved claims at any time after thie expiration of the period 
of advertisement made pursuant to the first sentence of this paragraph, 
and no liability shall attach to the Administrator himself for as such 
liquidating agent by reason of any such payment for failure to pay 
dividends to a claimant whose claim is not proved at the time of any 
such payment. 
"(3) Notwithstanding any other provision of law, the Adminis-
trator as liquidating agent of a closed Federal credit union insured 
under this title shall not be required to furnish bond and shall have 
the right to appoint an agent or agents to assist him in his duties as 
such liquidating agent. All fees, compensation, and expenses of liqui- 
^^^^* 
dation and admmistration thereof shall be fixed by the Administrator 
and may be paid by him out of funds coming into his possession as 
such liquidating agent. 
" (b) Whenever any insured State-chartered credit union shall have 
been closed by action of its board of directors or by the commission, 
board, or authority having supervision of such credit union, as the case 
may be, or by a court of competent jurisdiction, on account of bank-
ruptcy or insolvency, the Administrator shall accept appointment as 
liquidating agent therefor, if such appointment is tendered by the 
comjnission, board, or authority having supervision of such credit 
union, or by a court of competent jurisdiction, and is authorized or 
permitted by State law. With respect to any such State-chartered 
credit union, the Administrator as such liquidating agent shall possess 
all the rights, powers, and privileges granted by State law to a liqui-
dating agent of a State-chartered credit union. For the purposes of a^entl'^"^'^^""^ 
this subsection, the term 'liquidating agent' includes a liquidating 
agent, receiver, conservator, commission, person, or other agency 
charged by law with the duty of winding up the affairs of a credit 
union. 
" (c) Wlienever an insured credit union shall have been closed for 
Payment. 
liquidation on account of bankruptcy or insolvency, payment of the 
insured accounts in such credit union shall be made by the Adminis-
trator as soon as possible, subject to the provisions of subsection (d) of 
this section. For the purposes of this subsection, the term 'insured 
"insured ac-
account' means the total amount of the account in the member's name ''°^ * 
(after deducting offsets) less any part thereof which is in excess of 
$20,000. Such amount shall be determ^ined according to such regula-
tions as the Administrator may prescribe, and, in determining the 
amount due to any member, there shall be added together all accounts 
in the credit union maintained by him for his own benefit either in his 
own name or in the names of others. The Administrator may define, ^^°^^''^^^'' 
with such classifications and exceptions as he may prescribe, the extent 
of the insurance coverage provided for member accounts, including 
member accounts in the name of a minor, in trust, or in joint tenancy. 
The Administrator, in his discretion, may require proof of claims to 
claims, proof. 
be filed before paying the insured accounts, and in any case where he 
is not satisfied as to me validity of a claim for an insured account, he 
may require the final determination of a court of competent jurisdic-
tion before paying such claim. 
"(d) In the case of a closed Federal credit union, the Admin-
istrator, upon the payment to any member as provided in subsection 
(c) of this section, shall be subrogated to all rights of the member 
against such closed credit union to the extent of such payment. In 
the case of any other closed insured credit union, the Administrator 
shall not make any payment to any member until the right of the 
agent. 
1012 
PUBLIC LAW 91-468-OCT. 19, 1970 
[84 
STAT. 
Payment, 
charge of 
liability. 
dis-
Undisclo 
names 
s e d 
Assets, sale. 
Administrator to be subrogated to the rights of such member on 
the same basis as provided in the case of a closed Federal credit union 
shall have been recognized either by express provision of State law, 
by allowance of claims by the commission, board, or authority having 
supervision of such credit union, by assignment of claims by members, 
or by any other effective method. In the case of any closed insured 
credit union, such subrogation shall include the right on the part 
of the Administrator to receive the same dividends from the pro-
ceeds of the assets of such closed credit union as would have been 
payable to the member on a claim for the insured account^ but such 
member shall retain his claim for any uninsured portion of his account. 
The rights of members and other creditors of any State-chartered 
credit union shall be determined in accordance with the applicable 
provisions of State law. 
" (e) Payment of an insured account to any person by the Admin-
istrator shall discharge the Administrator to the same extent that 
payment to such person by the closed insured credit union would 
have discharged it from liability for the insured account. 
"(f) Except as otherwise prescribed by the Administrator, the 
Administrator shall not be required to recognize as the owner of 
any portion of an account appearing on the records of the closed credit 
union under a name other than that of the claimant any person whose 
name or interest as such owner is not disclosed on the records of such 
closed credit union as part owner of such account, if such recognition 
would increase the aggregate amount of the insured accounts in such 
closed credit union. 
"(g) The Administrator may withhold payment of such portion 
of the insured account of any member of a closed credit union 
as may be required to provide for the payment of any direct or 
indirect liability of such member to the closed credit union or 
its liquidaiting agent, which is not offset against a claim due from 
such credit union, pending the determination and payment of such 
liability by such member or any other person liable therefor. 
"(h) If, after the Administrator shall have given at least four 
months' notice to the member by mailing a copy thereof to his last-
known address appearing on the records of the closed credit union, 
any member of the closed credit union shall fail to claim his insured 
account from the Administrator within 18 months after the appoint-
ment of the liquidating agent for the closed credit union, all rights 
of the member against the Administrator with respect to the insured 
account shall be barred, and all rights of the member against the 
closed credit union, or the estate to which the Administrator may 
have become subrogated, shall thereupon revert to the member. 
"(i)(l) Liquidating agents of insured credit unions closed for 
liquidation on account of bankruptcy or insolvency may offer the 
assets of such credit unions for sale to the Administrator or as security 
for loans from the Administrator, upon receiving permission from the 
commission, board, or authority having supervision of such credit 
union, in the case of an insured State-chartered credit union, in 
accordance with express provisions of State law. The proceeds of every 
such sale or loan shall be utilized for the same purposes and in the 
same manner as other funds realized from the liquidation of the 
assets of such credit unions. The Administrator, in his discretion, may 
make loans on the security of or may purchase and liquidate or sell 
any part of the assets of an insured credit union closed for liquidation 
on account of bankruptcy or insolvency, but in any case m which 
the Administrator is acting as liquidating agent of a closed insured 
84 STAT. ] 
PUBLIC LAW 91-468-OCT. 19, 1970 
1013 
credit union, no such loan or purchase shall be made without the 
approval of a court of competent jurisdiction. 
" (2) No agreement which tends to diminish or defeat the right, title, 
or interest of the Administrator in any asset acquired by him under 
this subsection, either as security for a loan or by purchase, shall be 
valid against the Administrator unless such agreement— 
"(A) shall be in writing; 
"(B) shall have been executed by the credit union and the 
person or persons claiming an adverse interest thereunder, 
mcluding the obligor, contemporaneously with the acquisition of 
the asset by the credit union; 
"(C) shall have been approved by the board of directors of 
the credit union, which approval shall be reflected in the minutes 
of such board; and 
"(D) shall have been, continuously, from the time of its 
execution, an official record of the credit union. 
"SPECIAL ASSISTANCE TO AVOID LIQUIDATION 
"SEC. 208. (a) (1) In order to reopen a closed insured credit union 
Loans. 
or in order to prevent the closing of an insured credit union which the 
Administrator has determined is in danger of closing, the Adminis-
trator, in his discretion, is authorized to make loans to, or purchase the 
assets of, or establish accounts in such insured credit union upon such 
terms and conditions as he may prescribe. Such loans shall be made 
and such accounts shall be established only when, in the opinion of 
the Administrator, such action is necessary to protect the Fund or the 
interests of the members of the credit union. Such loans and accounts 
may be in subordination to the rights of members and creditors of the 
credit union. 
"(2) Whenever in the judgment of the Administrator such action 
will reduce the risk or avert a threatened loss to the fund and will 
facilitate a merger or consolidation of an insured credit union with 
another insured credit union, or will facilitate the sale of the assets 
of an open or closed insured credit union to and assumption of its 
liability by another insured credit union, the Administrator may, upon 
such terms and conditions as he may determine, make loans secured 
in whole or in part by assets of an open or closed insured credit union, 
which loans may be in subordination to the rights of members and 
creditors of such credit union, or the Administrator may purchase 
any of such assets or may guarantee any other insured credit union 
against loss by reason of its assuming the liabilities and purchasing 
the assets of an open or closed insured credit union. 
"(3) No agreement which tends to diminish or defeat the right, 
title, or interest of the Administrator, in any asset acquired by him 
under this subsection, either as security for a loan or by purchase, 
shall be valid against the Administrator unless such agreement— 
"(A) shall be in writing; 
"(B) shall have been executed by the credit union and the 
person or persons claiming an adverse interest thereunder, includ-
ing the obligor, contemporaneously with the acquisition of the 
asset by the credit union; 
" (C) shall have been approved by the board of directors of the 
credit union, which approval shall be reflected in the minutes of 
such board; and 
"(D) shall have been continuously, from the time of its execu-
tion, an official record of the credit union. 
1014 
PUBLIC LAW 91-468-OCT.19, 1970 
[84 STAT. 
"(b) For the protection of the Fund, the Administrator, without 
regard to the Federal Property and Administrative Services Act of 
63 Stat. 377. 
1949, m a j — 
note. 
"(1) ^®^1 with, complete, reconstruct, rent, renovate, mod-
ernize, insure, make contracts for the management of, sell for cash 
or credit, or lease, in his discretion, any real property acquired or 
held by him under this section; and 
" (2) assign or sell at public or private sale, or otherwise dispose 
of, any evidence of debt, contract, claim, personal property, or 
security assigned to or held by him under this section. 
41 use 5. 
Section 3709 of the Revised Statutes of the United States shall not 
apply to any purchase or contract for services or supplies made or 
entered into by the Administrator under this section if the amount 
thereof does not exceed $1,000, or to any contract for hazard insurance 
on any real property acquired or held by him under this section. 
" (c) In connection with the liquidation of any insured credit union, 
the Administrator shall have the power to carry on the business of and 
collect all obligations to the credit union, to settle, compromise, or 
release claims m favor of or against the credit union, and to do all 
other things that may be necessary in connection therewith, subject to 
the regulation of the court or other public body having jurisdiction 
over the matter. 
"(d) Money received by the Administrator in carrying out this sec-
tion shall be paid into the Fund. 
"ADMINISTRATIVE PROVISIONS 
"SEC. 209. (a) In carrying out the purposes of this title, the Admin-
istrator may— 
" (1) make contracts; 
" (2) sue and be sued, complain and defend, in any court of law 
or equity, State or Federal. All suits of a civil nature at common 
law or in equity to which the Administrator shall be a party shall 
be deemed to arise under the laws of the United States, and the 
United States district courts shall have original jurisdiction 
thereof, without regard to the amount in controversy. The Admin-
istrator may, without bond or security, remove any such action, 
suit, or proceeding from a State court to the United States district 
court for the district or division embracing the place where the 
same is pending by following any procedure for removal now or 
hereafter in effect, except that any such suit to which the Admin-
istrator is a party in his capacity as liquidating agent of a State-
chartered credit union and which involves only the rights or obli-
gations of members, creditors, and such State credit union under 
State law shall not be deemed to arise under the laws of the 
United States. No attachment or execution shall be issued against 
the Administrator or his property before final judgment in any 
suit, action, or proceeding in any State, county, municipal, or 
United States court. The Administrator shall designate an agent 
upon whom service of process may be made in any State, territory, 
or jurisdiction in which any insured credit union is located; 
" (3) pursue to final disposition by way of compromise or other-
wise claims both for and against the United States (other than 
tort claims, claims involving administrative expenses, and claims 
in excess of $5,000 arising out of contracts for construction, 
repairs, and the purchase of supplies and materials) which are not 
in litigation and have not been referred to the Department of 
Justice; 
84 STAT.] 
PUBLIC LAW 91-468-OCT. 19, 1970 
1015 
"(4) to appoint such officers and employees as are not other-
wise provided for in this Act, to define their duties, fix their com-
pensation, require bonds of them and fix the penalty thereof, and 
to dismiss at pleasure such officers or employees. Nothing in this 
or any other Act shall be construed to prevent the appointment 
and compensation as an officer or employee of the Administration 
of any officer or employee of the United States in any board, 
commission, independent establishment, or executive department 
thereof; 
"(5) employ experts and consultants or organizations thereof, 
as authorized by section 15 of the Administrative Expenses Act of 
1946(5U.S.C.55a); 
"(6) prescribe the manner in which his general business may 
be conducted and the privileges granted to him by law may be 
exercised and enjoyed; 
"(7) exercise all powers specifically granted by the provisions 
of this title and such incidental powers as shall be necessary to 
carry out the powers so granted ; 
" (8) make examinations of and require information and reports 
from insured credit unions, as provided in this title. 
" (9) act as liquidating agent; 
" (10) delegate to any officer or employee of the Administration 
such of his functions as he deems appropriate; and 
"(11) prescribe such rules and regulations as he may deem 
necessary or appropriate to carry out the provisions of this title. 
"(b) With respect to the financial operations arising by reason of 
this title, the Administrator shall— 
"(1) prepare annually and submit a business-type budget as 
provided for wholly owned Government corporations by the Gov-
ernment Corporation Control Act; and 
" (2) maintain an integral set of accounts, which shall be audited 
annually by the General Accounting Office in accordance with 
principles and procedures applicable to commercial corporate 
transactions, as provided by section 105 of the Government Cor-
poration Control Act. 
"NONDISCRIMINATORY 
PROVISION 
"SEC. 210. It is not the purpose of this title to discriminate in any 
manner against State-chartered credit unions and in favor of Federal 
credit unions, but it is the purpose of this title to provide all credit 
unions with the same opportunity to obtain and enjoy the benefits of 
this title." 
SEC. 2. Section 101 of the Federal Credit Union Act, as redesignated 
by section 1 of this Act (formerly section 2 of such Act), is amended— 
(1) by striking out the word "and" at the end of paragraph (2) 
thereof; 
(2) by striking out the period at the end of paragraph (3) 
thereof and inserting "; and" in lieu thereof; and 
(3) by adding the following new paragraphs after paragraph 
(3) thereof: 
"(4) The terms 'member account' and 'account' (when referring to 
the account of a member of a credit union) mean a share, share certifi-
cate, or share deposit account of a member of a credit union of a type 
approved by the Administrator which evidences money or its equiva-
lent received or held by a credit union in the usual course of business 
and for which it has given or is obligated to give credit to the account 
of the member, and, in the case of a credit union serving predominantly 
60 Stat. 810. 
5 u s e 3109. 
59 Stat. 597. 
31 u s e 841 
note. 
GAG audit. 
59 Stat. 599; 
78 Stat. 698. 
31 u s e 850. 
Definitions, 
73 Stat. 628. 
12 u s e 1752. 
47-348 O - 72 - 68 (Pt. 1) 
1016 
PUBLIC LAW 91-468-OCT. 19, 1970 
[84 STAT. 
low-income members (as defined by the Administrator), such terms 
(when referring to the account of a nonmember served by such credit 
union) mean a share, share certificate, or share deposit account of such 
nonmember which is of a type approved by the Administrator and 
evidences money or its equivalent received or held by such credit union 
in the usual course of business and for which it has given or is obligated 
to give credit to the account of such nonmember; 
"(5) The terms 'State credit union' and 'State-chartered credit 
union' mean a credit union organized and operated according to the 
laws of any State, the District of Columbia, the several territories and 
possessions of the United States^ the Panama Canal Zone, or the Com-
monwealth of Puerto Rico, which laws provide for the organization 
of credit unions similar in principle and objectives to Federal credit 
unions; 
"(6) The term 'insured credit union' means any credit union 
the member accounts of which are insured in accordance with the pro-
visions of title I I of this Act, and the term 'noninsured credit union' 
means any credit union the member accounts of which are not so 
insured; 
" (7) The term 'Fund' means the National Credit Union Share Insur-
ance Fund; and 
"(8) The term 'branch' includes any branch credit union, branch 
office, branch agency, additional office, or any branch place of business 
located in any State of the United States, the District of Columbia, 
the several territories and possessions of the United States, the 
Panama Canal Zone, or the Commonwealth of Puerto Rico, at which 
member accounts are established or money lent." 
62 Stat. 711. 
SEC. 3. Section 493 of title 18 of the United States Code (relating 
to bonds and obligations of certain lending agencies) is amended— 
(1) by inserting the words "National Credit Union Adminis-
tration," following the words "Federal Deposit Insurance Cor-
poration,"; and 
(2) by inserting the words "insured credit union," following 
the worcls "intermediate credit bank,". 
62 Stat. 7 29. 
QEC. 4. Sectlon 657 of title 18 of the United States Code (relating 
to lending, credit, and insurance institutions) is amended— 
(1) by inserting the words "National Credit Union Adminis-
tration,'' following the words "Federal Deposit Insurance Cor-
poration," ; and 
(2) by inserting the words "or by the Administrator of the 
National Credit Union Administration" following the words 
"Federal Savings and Loan Insurance Corporation". 
gj6 2 stat^^733; 
gj,c. 5. Sectiou 709 of title 18 of the United States Code (relating 
to false advertising and misuses of names to indicate a Federal 
agency) is amended by adding after the third paragraph thereof the 
following paragraph: 
"Whoever falsely advertises or otherwise represents by any device 
whatsoever that his or its deposit liabilities, obligations, certificates, 
73 Stat. 6 28. 
or ^ares are insured under the Federal Credit Union Act or by the 
1
2 use 1751. 
United States or any instrumentality thereof, or, being an insured 
credit union as defined in that Act falsely advertises or otherwise 
represents by any device whatsoever the extent to which or the manner 
in which shareholdings in such credit union are insured under such 
Act; or". 
70 sta\^'*7H°' 
SEC. 6. Section 1006 of title 18 of the United States Code (relating 
to false entries in reports and transactions of Federal credit institu-
tions) is amended— 
(1) by inserting the words "National Credit Union Adminis-
tration," following the words "Federal Deposit Insurance Cor-
poration,"; and 
84 STAT. ] 
PUBLIC LAW 91-468-OCT. 19, 1970 
1017 
(2) by inserting the words "or by the Administrator of the 
National Credit Union Administration" following the words 
"Federal Savings and Loan Insurance Corporation". 
SEC. 7. Section 1014 of title 18 of the United States Code (relating ^^%^l[%l^^' 
to false statements in loan and credit applications) is amended by 
striking out the words "or a Federal credit union" and by inserting 
the words ", a Federal credit union, or an insured State-chartered 
credit union" in lieu thereof. 
SEC. 8. Section 2113 of title 18 of the United States Code (relating 
^4 stat. 394. 
to bank robbery and incidental crimes) is amended as follows: 
(1) Subsections (a^, (b), and (c) are each amended by inserting 
the words "credit union," following the word "bank," each place 
it appears therein. 
(2) The following new subsection is added at the end thereof: 
"(h) As used in this section the term 'credit union' means any 
"Credit union." 
Federal credit union and any State-chartered credit union the accounts 
of which are insured by the Administrator of the National Credit 
Union Administration." 
SEC. 9. Section 116 of the Federal Credit Union Act, as redesig- Reserves. 
nated by section 1 of this Act (formerly section 17 of such Act), is H f^^^^ ^^^^ 
amended to read as follows: 
"SEC. 116. (a) Immediately before the payment of each dividend, 
the gross earnings of the credit union shall be determined. From this 
amount, there shall be set aside, as a regular reserve against losses on 
loans and against such other losses as may be specified in regulations 
prescribed under this Act, sums in accordance with the following 
schedule: 
"10 per centum of gross income until the regular reserve shall 
equal fi/^ per centum of the total of outstanding loans and risk 
assets, then 
"6 per centum of gross income until the regular reserve shall 
equal 10 per centum of the total of outstanding loans and risk 
assets. 
Whenever the regular reserve falls below 10 per centum or 7i/^ per 
centum of the total of outstanding loans and risk assets, as the case 
may be, it shall be replenished by regular contributions in such amounts 
as may be needed to maintain the reserve goals of 7i/^ per centum or 
10 per centum. 
" (b) In addition to such regular reserve, special reserves to protect 
the interests of members shall be established— 
" (1) when required by regulation; or 
"(2) when found by the Administrator, in any special case, 
to be necessary for that purpose." 
SEC. 10. Section 107 of the Federal Credit Union Act, as redesig-
nated by section 1 of this Act (formerly section 8 of such Act), is 
amended— 
(1) by striking out paragraph (7) and inserting in lieu thereof 
the following: 
"(7) to receive from its members or other federally insured 
credit unions payments on shares, share certificates, or share 
deposits, and, in the case of credit unions serving predominantly 
low-income members (as defined by the Administrator), to re-
ceive payments on shares, share certificates, or share deposits from 
nonmembers;" and 
(2) by adding at the end of paragraph (8) the following: 
"and (H) in shares, share certificates, or share deposits of fed-
erally insured credit unions;". 
Approved October 19, 1970. 
81 Stat. 110; 
82 Stat. 284. 
12 u s e 1757.