An Act To Amend the Maine Banking Laws
Maine Legislature, Session 121, LD 1534
Committee: Insurance and Financial Services
Sponsors: LaFOUNTAIN
Amends: 9-B MRSA §131, 8 MRSA §131, 8 MRSA §214, 9-B MRSA §214, 9-B MRSA §225, 9-B MRSA §228, 9-B MRSA §241, 9-B MRSA §361, 9-B MRSA §427, 9-B MRSA §826, 9-B MRSA §827, 9-B MRSA §83, 9-B MRSA §832, 9-B MRSA §833, 9-B MRSA §836, 9-B MRSA §842, 9-B MRSA §844, 9-B MRSA §845, 9-B MRSA §852, 9-B MRSA §854, 9-B MRSA §861, 9-B MRSA §871

Legislative Document 
No. 1534 
S.P.512 
In Senate, April 8, 2003 
An Act To Amend the Maine Banking Laws 
Submitted by the Department of Professional and Financial Regulation pursuant to Joint 
Rule 204. 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator LaFOUNTAIN of York. 
Printed on recycled paper 
JOY J. O'BRIEN 
Secretary of the Senate 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 9-B MRSA §131, sub-§3, as amended by PL 1997, c. 398, 
Pt. A, §l, is further amended to read: 
3. 
Branch. 
"Branch" 
means 
any 
office 
of 
a 
financial 
institution, including a 
credit union, 
where the business of 
banking is conducted other than the institution's main office. 
A 
branch includes an office or vehicle that is not permanent and 
that is capable of being moved or transferred from one location 
to another. 
Sec. 2. 9-B MRS A §131, sub-§17, as amended by PL 1997, c. 398, 
Pt. A, §8, is further amended to read: 
17. 
Financia1 institution. "Financial institution" means a 
universal 
bank 
or 
limited purpose 
bank 
organized 
under 
the 
provlslons of this Title, 
and 
a trust company, 
nondepository 
trust company, savings bank, industrial bank or savings and loan 
association organized under the prior laws of this State. 
A6-~He 
~eFffi-~~-~~~-~BS~~~Q~~9B~-~-~£eQ--~-Pa~~~--~-~-b-~-iB 
eHa~~eF-~--~-iBe~QQeS-~~~~~-9F~aB~Bea-~~--~-~Re 
~aws--Q-~-~hl~--S1:.a1:.e... 
When the term "financial institution" 
1S 
used in Parts 1 and 2 and sections 422-A, 
427, 428, 
and 
chapter 46, 
the term also includes 
a 
credit union organized 
pursuant to the laws of this State. 
Sec. 3. 9-B MRSA §131, sub-§23-A, as enacted by PL 1997, c. 
398, Pt. A, §13, is amended to read: 
23-A. 
Investor. 
"Investor" means any person who has an 
ownership interest in a financial institution and is entitled to 
vote 
under 
the 
institution's 
organizational 
documents. 
"Investor" does not include a member of a credit union organized 
pursuant to the laws of this State. 
Sec. 4. 9-B MRSA §131, sub-§35, as amended by PL 1999, c. 
229, §1, is further amended to read: 
35. 
Sate11.ite facil.ity. 
"Satellite facility" means 
any 
facility, automated device or electronic terminal established by 
a financial institution authorized to do business in this State 
or a credit union authorized to do business in this State at 
which an existing financial institution customer may initiate 
banking 
transactions, 
including, 
but 
not 
limited 
to, 
cash 
deposits to and withdrawals from that customer's account, cash 
advances 
on 
a 
preauthorized 
credit 
line, 
transfers 
between 
deposit 
or 
share 
accounts 
or 
payment 
transfers 
from 
the 
customer's account to accounts of other financial institution 
customers. Such a facility is not permanently staffed and is not 
Page l-LR1922(1} 
part 
of 
a 
main 
office 
or 
branch 
office 
of 
a 
financial 
institution. Such a facility may be part of an electronic funds 
transfer system. 
Satellite facilities include facilities engaged 
in soliciting, receiving or accepting money or its equivalent on 
deposi t 
from new and existing customers. 
'J1he--t.~-m--!!6at.eJJit.e 
EaeiHt.y!! "Satellite facility" does not include a cash dispensing 
machine that, 
operating in conjunction with a 
processor 
and 
network, allows a customer to debit an account in exchange for 
dispensing cash and that may 
allow a 
customer to effectuate 
transfers between the customer's accounts in the same financial 
institution, a point-of-sale terminal, a night depository or an 
office 
or 
facility 
engaged 
solely 
in 
the 
solicitation 
and 
origination of loans. 
Sec. 5. 9-8 MRSA §131, sub-§37-A is enacted to read: 
A. 
Share account. 
"Share account" means 
a 
share or 
deposit account at a credit union held by or offered to a member 
or 
potential 
member. 
"Share 
account" 
includes. 
but is not 
limited to. accounts such as share. share draft and term share 
accounts. 
Sec. 6. 9-8 MRSA §214, sub-§2, as amended by PL 1993, c. 538, 
§1, is further amended to read: 
2. 
Assessment on financial institutions. 
A. 
To provide for the balance of the reasonable expenses 
incurred to fulfill the bureau's duty pursuant to this 
Title, 
including 
general 
regulatory 
costs, 
overhead, 
transportation 
and 
general 
office 
and 
administrative 
expenses, 
the superintendent shall assess each financial 
institution under the superintendent's 
superv~s~on at the 
annual rate of at least 6¢ for each $1,000 of the total of 
average 
assets, 
as 
defined 
by 
the 
superintendent. 
The 
frequency of assessment may coincide with the frequency of 
filing periodic financial reports with the bureau but may 
not be more frequent than quarterly. 
The superintendent may 
raise the minimum assessment rate of 6¢ for each $1, 000 of 
the total of average assets by promulgating rules pursuant 
to section 251 at such time as economic conditions warrant 
such an increase. In no event may the 
semiaBB~aJ assessment 
be less than $25. 
B. 
An assessment pursuant to paragraph A may be made on or 
before the assessment date for the period prescribed as 
follows: 
Quarterly 
Period ending 
March 31st 
June 30th 
September 30th 
December 31st 
JliRe-~Qt::h 
geeel'Rsel'-alst:: 
Assessment date 
May 1st 
August 1st 
November 1st 
February 1st 
Ali~liSt::-lst; 
~esl'lial'y-lst:: 
The superintendent shall il'Rl'Reaiat::ely notify the financial 
institution of the assessment. The assessment must be paid 
to the Treasurer of State within 10 days 
following the 
assessment date. 
Sec. 7. 9-B MRSA §214, sub-§2-B, as amended by PL 2001, c. 
211, §3, is further amended to read: 
2-B. 
Assessment 
on 
nondepository 
trust 
companies. 
Nondepository trust companies that are not affiliated with a 
financial institution shall pay an 
aRRlial 
assessment at the 
annual rate of not less than $2,000 or an amount determined by 
the superintendent of at least 6¢ for every $10,000 of fiduciary 
assets under its management, custody or care. 
The superintendent 
may further define by rule fiduciary assets under management, 
custody 
or 
care 
or 
change 
the 
minimum 
assessment 
whenever 
economic 
conditions 
warrant 
such 
a 
change. 
Rules 
adopted 
pursuant 
to this 
subsection are 
routine 
technical 
rules 
as 
defined in Title 5, 
chapter 375, 
subchapter ±±-A 2-A. 
These 
assessments must be paid aRRlially-~-~~~-19t::h-~-~-yeaF 
eR-~~~~~~~-elit::st::aRaiR~-~~--~~-e~-~~~~~~-yeaF 
in accordance with subsection 2, paragraph B. 
Sec. 8. 9-B MRSA §214, sub-§2-C, as enacted by PL 2001, c. 
211, §4, is amended to read: 
2-C. 
Assessment on uninsured bank or merchant bank. 
I f an 
uninsured bank or merchant bank predominately engages in the 
business of a nondepository trust company, 
then the uninsured 
bank 
or 
merchant 
bank 
shall 
pay 
an 
aRRlial 
assessment 
as 
prescribed in subsection 2-B. 
Otherwise, an uninsured bank or 
merchant bank shall pay an aRRlial assessment as prescribed in 
subsection 2. 
Sec. 9. 9-B MRSA §214, sub-§4, as enacted by PL 1975, c. 500, 
§1, is amended to read: 
4. 
Penalty. Any financial institution whieh-shall-~ail that 
fails to make 
slieh the payments required under this section 
within the time specified shall-se is subject to a penalty of not 
more than $199 ~ 
per day for each day it is in violation of 
this section, which penalty, together with the amount due under 
EeFeEjeiliEj ~ 
provisions of this section, may be recovered in a 
civil action in the name of the State. 
Sec. 10. 9-B MRSA §225, sub-§I, as enacted by PL 1975, c. 500, 
§1, is amended to read: 
1. 
Superintendent's authority. All records of financial 
institutions authorized to do business in this State and of 
EeaeFally-ehaF~eFea---~~~----iliS~i~~~ielis 
credit 
unions 
authorized to do business in this State, insofar as this section 
does not contravene paramount ~eaeFal federal law, shall ~ 
be 
retained for 
such minimum periods 
as 
the 
superintendent 
may 
prescribe. 
Sec. 11. 9-B MRSA §228, sub-§I, as enacted by PL 1975, c. 500, 
§1, is amended to read: 
1. 
Requirement. If, in the 
op~n~on of the superintendent, 
any financial institution authorized to do business in this State 
or credit union authorized to do business in this State, or 
i~s 
the officers, corporators, directors, employees or agents have of 
any financial institution authorized to do business in this State 
or credit union authorized to do business in this State, has 
persistently violated any provision of this Title or 
FeEj~la~ieB 
prem~lEja~ea--£here~BaeF 
rule 
adopted 
under 
this 
Title, 
the 
superintendent shall 
EeF~hwi£h report the saRle violation, with 
s~eR any 
remarks 
as--he--aeems 
the 
superintendent 
determines 
appropriate, to the Attorney General who may 
EeF~hwi~h institute 
a prosecution ~heFeEeF of the violation on behalf of the State. 
Sec. 12. 9-B MRSA §241, sub-§7, as repealed and replaced by PL 
1997, c. 660, Pt. D, §2, is amended to read: 
7. 
Restrictions 
on 
use 
of 
names 
of 
Maine 
financial 
institutions on credit cards. 
A credit card may be titled and 
may have the name of a financial institution authorized to do 
business in this State or credit union authorized to do business 
in this State on the card if: 
A. 
The terms of the credit card contract comply with the 
laws 
applicable to that financial institution or credit 
union; or 
B. 
The 
name 
and state 
~c~r~e~d~i~t~~u~n~~~'~o~n underwriting 
card. 
of 
the 
the financial 
debt appears 
institution 
QK 
on the credit 
Sec. 13. 9-BMRSA§244, as enacted by PL 1975, c. 500, §l, is 
amended to read: 
§244. Exemption. 
ABy A financial institution authorized to do business in 
this State or credit union authorized to do business in this 
State subject to the provl.sl.ons of this chapter shall--ae is 
exempt from the provisions of Title 5, chapter 10. 
Sec. 14. 9-B MRSA §361, as amended by PL 1997, c. 398, Pt. H, 
§1, is further amended to read: 
§36l. Applicability of chapter 
';I;he 
Notwithstanding 
any 
other 
provisions 
of 
law, 
the 
provisions of this chapter apply to and supersede 
any other 
provision 
of 
law 
governing 
conservation, 
liguidation 
and 
insolvency of financial institutions organized under the laws of 
this State. 
Sec. IS. 9-B MRSA §427, sub-§14 is enacted to read: 
14. 
Applicability. 
This 
section 
applies 
to 
financial 
institutions authorized to do business in this State and credi t 
unions authorized to do business in this State. 
Sec. 16. 9-BMRSA§824, as enacted by PL 1975, c. 500, §1, is 
amended to read: 
§824. Participation in electronic funds transfer system 
1. 
Authorization. A credit 
unionT--w,i-t-h--~he--p-r-i<H:--wl'i~~eR 
aFFI'9val-e~-~he-6~pe£iB~eBaeB~T may issue ~e-i~s-ffieffiael's cards or 
other devices 
Fe~lRit.t.in~--s\,leh to its members that permi t 
the 
members 
to gain access to 
or participate in an established 
electronic funds transfer system. 
3y--~~~~a~ieBsT--~-~£~--ef-~-€a£Q6-~r-~~--aeviees 
F\,lI'S\,laB~-t.e-6~B£~€~~en-~-~-t~~~~~-~h&-~reG~~-\,lBieR-sha±± 
ae-6~aje€t.-~e-~~~~~~~-~~1t~~~-~r~a-iB-see~ieB 
8§~-aBa-8§+T 
Sec. 17. 9-B MRSA §826, as amended by PL 1983, c. 373, §2, is 
repealed and the following enacted in its place: 
§826. Offices and satellite facilities 
A credit union may establish, relocate, close and operate a 
branch or satellite facility in accordance with chapter 
33, 
except that the limitation of section 337, subsection 2 does not 
apply. 
The 
limits 
of 
section 
apply 
to 
credit 
union 
investment 
in 
real 
estate 
for 
office 
facilities. 
The 
establishment. relocation or closing of a branch or facility must 
meet the needs and convenience of the credit union's members. 
Sec. 18. 9-B MRSA §827, sub-§3, as enacted by PL 1995, c. 512, 
§l, is amended to read: 
3. 
Lien on shares. 
A credit union may impress and enforce 
a lien on the shares and dividends of a member to the extent of 
any loan made to and any dues or charges payable by that member. 
A credit union that has been designated a community development 
credit union pursuant to section 817 may impress and enforce a 
lien on the shares and dividends of a nonmember to the extent of 
any 
loan 
made 
to 
and 
any 
dues 
or 
charges 
payable 
by that 
nonmember. 
Sec. 19. 9-B MRSA §83I, sub-§2, as amended by PL 1997, c. 108, 
§ll, is further amended to read: 
2. 
Share transactions. The provisions of 
422-A, 
427, 
and 
are applicable 
to 
accounts in a credit union. 
seet;ieB sections 
shares 
or 
share 
Sec. 20. 9-B MRSA §832, sub-§2, as amended by PL 1979, c. 663, 
§54, 
~s further amended to read: 
2. 
Payments to fund. 
Before the payment of a 
dividend, 
there shall must be set apart into the guaranty fund a percentage 
of 
the 
gross 
income 
of 
the 
credit 
union 
whieh ~ 
was 
accumulated 
during 
the 
preceding 
dividend 
period, 
in 
the 
following manner: 
A. 
For credit unions in operation less than 4 years or 
having assets of less than $500,000, 
10'1& of gross income 
until the guaranty fund 
shall-e~~al e~uals 7'1& of the total 
outstanding loans and risk assets of the credit union and 
then 5% of the gross income until the guaranty fund shall 
eEjlial eguals 
10% of the total outstanding loans and risk 
assets; or 
B. 
For credit unions in operation more than 4 years and 
having assets of $500,000 or more, 10'1& of gross income until 
the 
guaranty 
fund 
shall--eEjlial 
eguals 
4'1& 
of 
the 
total 
outstanding loans and risk assets of the credit union and 
then 5'1& of the gross income until the guaranty fund shall 
e~lial 
e~uals 6'1& 
of the total outstanding loans and risk 
assets. 
The superintendent may waive all or part of the payments reguired 
under this subsection for good cause shown by a credit union. 
Sec. 21. 9-B MRSA §832, sub-§5 is enacted to read: 
5. 
Rulemaking. 
The 
superintendent 
may 
adopt 
rules 
to 
implement this section or vary the amount of the fund reguired 
under this section. 
Rules adopted pursuant to this subsection 
are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A. 
Sec. 22. 9-B MRSA §833, sub-§I, as amended by PL 1997, c. 398. 
Pt. L, §8, is repealed. 
Sec. 23. 9-B MRSA §833, sub-§I-A is enacted to read: 
I-A. 
Time 
for 
p~nt of dividends; 
method. 
At 
such 
intervals as the board of directors may authorize and after 
prov~s~on for the guaranty fund established pursuant to section 
832, the board of directors may declare a dividend to be paid at 
different rates on different types of shares, at different rates 
and maturity dates in the case of share certificates and at 
different rates 
on different types of share draft accounts. 
Dividends credited may be accrued on various types of shares, 
share certificates and share draft accounts as authorized by the 
board of directors. 
Sec. 24. 9-B MRSA §833, sub-§2, as enacted by PL 1975, c. 500, 
§l, is repealed. 
Sec. 25. 9-B MRSA §833, sub-§3-A, as enacted by PL 1981, c. 
501, §36, is repealed. 
Sec. 26. 9-BMRSA§835, as enacted by PL 1975, c. 500, §l, is 
repealed. 
Sec. 27. 9-B MRSA §836, sub-§2, as corrected by RR 1997, c. 2, 
§37, is repealed. 
Sec. 28. 9-BMRSA§836,sub-§3, as enacted by PL 1975, c. 500, 
§l, is repealed. 
Sec. 29. 9-B MRSA §842, sub-§2, 1JB, as enacted by PL 1975, c. 
500, §l, is amended to read: 
B. 
To fix 
from time to time the maximum 
amount, 
both 
secured and unsecured, 
which may 
be 
loaned to anyone 
member, except as limited by chapter 85L- and to establish a 
written loan policy pursuant to section 851, which must be 
reviewed and ratified at least annually; 
Sec. 30. 9-B MRSA §842, sub-§2, 1rH, as enacted by PL 1975, c. 
500, §1, is amended to read: 
H. 
To 
have 
charge of the 
investment of 
funds 
and to 
establish a written investment policy pursuant to section 
861, which must be reviewed and ratified at least annually; 
Sec. 31. 9-B MRSA §842, sub-§2, tJ, as enacted by PL 1975, c. 
500, §1, is amended to read: 
J. 
To appoint a supervisory committee of not less than 3 
members, 
not 
more 
than 
one 
member 
of 
which 
may 
be 
a 
director.,.. 
If the duties of the supervisory committee are 
conducted by an independent public accountant and the board 
has contracted for an annual audit by an independent public 
accountant pursuant to section 844, a supervisory committee 
need not be appointed: 
Sec. 32. 9-B MRSA §842, sub-§5, as enacted by PL 1975, c. 500, 
§l, is repealed. 
Sec. 33. 9-B MRSA §844, as amended by PL 2001, c. 211, §19, 
is further amended to read: 
§044. Supervisory committee or independent public accountant 
1. 
Duties of supervisory committee. 'J;he ~ 
supervisory 
commi tteeT is appointed pursuant to section 842, subsection 2, 
the supervisory committee shall keep informed fully and at all 
times as to the financial condition of the credit union, shall 
examine or cause to be examined carefully the cash and accounts 
of the credit union annually, and shall report to the board of 
directors its findings, together with its recommendations. 
The 
supervisory committee shall hold meetings at least once each 
quarter and shall keep records of the meetings. 
The supervisory 
committee shall make an annual report at the annual meeting of 
members of the credit union. 
1-A. 
Duties of independent public accountant. 
If the board 
of directors employs an independent public accountant, the annual 
audits must be conducted pursuant to section 453. 
Verification 
of share, deposit and loan accounts must be conducted pursuant to 
this section. 
2. 
Verification of share, deposit and loan accounts. 
A. 
At 
least 
once 
in 
every 
years, 
the 
supervisory 
committee or the independent public accountant shall verify 
or cause to be verified the share, deposit and loan accounts 
of 
members 
of 
the 
credit 
verification must 
be 
kept 
reviewed at the time of the 
by the superintendent. 
union 
and 
a 
report 
of 
the 
on file 
and available to 
be 
next examination or upon request 
(1) 
If 
the 
verification 
is 
performed 
by 
the 
supervisory 
committee, 
a 
controlled verification of 
100'\. of the members' share, deposit and loan accounts 
must be made. 
(2) 
If the verification is performed by a certified 
public 
accountant, 
the 
auditor 
may 
choose 
the 
verification method set forth in subsection 1 
or 
a 
sampling method sufficient in both number and scope on 
which to base conclusions concerning the validity of 
such records. 
B. 
If 
the 
superintendent 
determines 
such 
verification 
inadequate, 
the 
superintendent 
may 
cause 
the 
bureau 
to 
verify such accounts; and the bureau must have full access 
to every aspect of the credit union's activities and to all 
books, papers, vouchers, resources and all other records and 
property belonging to said credit union, 
whether in its 
immediate 
possession 
or 
otherwise, 
for 
the 
purpose 
of 
facilitating such verification. 
C. 
Expenses incurred by the 
verification must 
be 
paid 
by 
credited and used as provided in 
superintendent 
the 
credit 
section 214. 
in any such 
union, 
to 
be 
~Y--~iag6~-~~~~~r~-eemmi~~ee-~~~-~~-mee~ia~6 
a~-±eas~-eaee-eaeh-~QaF~eFT-aRa-shall-keep-FeeeFas-~he~ee~T 
4~--~-~epe~~~-~~~~~r~-eemmi~~ee-~~-~~-aa 
aRaQal-~~~-a~--~h&-~--mee~ia~-~-memge£~-~~-~~-eFeait 
QRieRT 
5. 
Exception. 
Notwithstanding 
the 
provisions 
of 
subsections 1 and I-A, any credit union that has total assets in 
excess 
of 
$50,000,000 
must 
employ 
an 
independent 
public 
accountant to conduct an annual audit of the credit union. 
6. 
Kulemating. 
The 
superintendent 
may 
adopt 
rules 
to 
further define the duties of the supervisory committee. 
Rules 
adopted pursuant to this subsection are routine technical rules 
as defined in Title 5, chapter 375, subchapter 2-A. 
Sec. 34. 9-B MRSA §845, sub-§l, as enacted by PL 1975, c. 500, 
§1 is amended to read: 
1. 
Powers 
and duties. 
'Ihe ~ 
credit 
appointed pursuant to section 842, 
subsection 
committee shall: 
A. 
Hold meetings at least once in each month; 
committeer II 
2, 
the credit 
B. 
Act on all applications for loans to members; 
c. 
Approve in writing all personal loans granted and the 
security, if any, pledged theFefeF for personal loans; and 
D. 
Submit to the board of directors all applications for 
loans to be secured by mortgages of real estate, with its 
recommendations 
theFeeB on the applications, 
which shall 
must include a signed appraisal as to its best judgment of 
the value of the real estate involved. 
Sec. 35. 9·B MRSA §846, sub·§l, as amended by PL 1983, c. 51, 
§6, is further amended to read: 
1. 
Time and notice. The annual meeting of the members of a 
credit union shall I!l.Y£t be held at such time and place as the 
board of directors may determine, but not later than 180 days 
after the close of the fiscal year. Special meetings may be 
called at any time by a majority of the directors, and shall must 
be called by the clerk upon written 
a~~lieatieB--o-f--1Q--Q-r--ffief'e 
memaeFs-eBtitles-te-vete request of 25 members or 5% of the total 
members entitled to vote as of the date of request. whichever 
number is greater. 
Notwithstanding this section, the maximum 
number of members required to call a special meeting may not 
exceed 500. 
Notice of all meetings of the members shall ~ 
be 
given in the manner prescribed in the bylaws. 
Sec. 36. 9·B MRSA §851, as amended by PL 1997, c. 398, Pt. L, 
§9, is further amended to read: 
§8S1. Loans in general 
1. 
Authorization. 
A credit union may make, sell, purchase, 
arrange, participate in, invest in and otherwise deal in loans to 
its members for any purpose in accordance with the provisions of 
this chapter. 
2. 
Applicability of other sections. In addition, a credit 
union is subject to seetieB sections 432 
FelatiB~--t~-iBteFest 
aaseBt-iB-wFitiB~, 433, 435 and 436. 
3. 
Approvals required. The credit committee provided for in 
section 845 shall approve all loans to members made by the credit 
union. In addition, the approval of the credit union' s board of 
directors or executive committee shall be required for all loans 
other than personal loans to members. 
4. 
Written lOan policy. 
The 
board of directors shall 
establish a 
written loan policy, 
which must be 
reviewed and 
ratified at least annually, 
that addresses at a 
minimum the 
following: 
A. 
Individual lending officer authority; 
B. 
Loan mix and diversification; 
C. 
Loan quality parameters; and 
D. 
Delegation of 
authority to officers 
and 
committees 
responsible for administering the portfolio. 
Sec. 37. 9-B MRSA §852, sub-§2, as enacted by PL 1975, c. 500, 
§1, is repealed. 
Sec. 38. 9-B MRSA §854, sub·§3 is enacted to read: 
3. 
Rulemating. 
The 
superintendent 
may 
adopt 
rules 
to 
administer and carry out this section, including rules to define 
or further define terms used in this section and to establish 
limits 
or 
requirements 
other 
than 
those 
specified 
in 
this 
section. 
Rules adopted pursuant to this subsection are routine 
technical rules as defined in Title 5, chapter 375, subchapter 
2-A. 
Sec. 39. 9-B MRSA §861, sub-§3 is enacted to read: 
3. 
Written investment policy. 
A credit union' s board of 
directors shall establish a written investment policy, which must 
be reviewed and ratified at least annually, that addresses at a 
minimum the following: 
A. 
Investment quality parameters; 
B. 
Investment mix and diversification; 
C. 
Investment maturities; and 
D. 
Delegation of 
authority to officers 
and 
committees 
responsible for administering the portfolio. 
Sec. 40. 9·B MRS A §862, sub-§l, as amended by PL 1985, c. 533, 
§1, is further amended to read: 
Page ll-LRI922(1} 
1. 
Deposits in insured institutions. Deposits or share 
accounts in any financial institutionT or 
sha~e&--i-n--a credit 
union, PF9¥iGeG-t.hat; as long as deposits or shares in saeh the 
financial institution or credit union are insured by the Federal 
Deposit 
Insurance 
CorporationT--t;he--~eaeFal--SayiB~s--aBa--b9aB 
±RSaFaR€e----C~~p9Fa~i9B 
or 
the 
National 
Credit 
Union 
Administration; 
Sec. 41. 9-B MRSA §871, as amended by PL 1979, c. 429, §14, 
is repealed. 
Sec. 42. 9-B MRSA §§871-A and 871-B are enacted to read: 
§S7l-A. 
Dissolution 
1. 
Volunta~ dissolution. 
This 
subsection governs 
the 
voluntary dissolution of a credit union. 
A. 
A recommendation may be made that a credit union be 
dissolved and voluntarily liguidated by majority vote of 
either the entire membership of the credit union entitled to 
vote or the board of directors of the credit union. 
Within 
days after recommendation, the credit union shall notify 
the 
superintendent, 
the federal 
agency that insures 
the 
credit 
union 
accounts 
and 
the 
credit 
union 
members 
in 
writing 
of 
the 
recommendation 
and 
the 
reasons 
for 
dissolution. 
If the entire membership votes to dissolve and 
voluntarily liguidate the credit union, then no additional 
votes of the entire membership need be taken. 
If the board 
of directors of the credit union votes to dissolve and 
voluntarily liguidate 
the credit 
union, 
then 
a 
special 
meeting of the credit union's entire membership must be 
called, no sooner than 10 days after notice has been mailed 
to the superintendent. 
A majority of the entire membership 
of the credit union entitled to vote must vote to dissolve 
and voluntarily liguidate the credit union. 
Members 
may 
cast their votes by proxy on forms prepared by the board of 
directors and mailed with the meeting notice. 
B. 
Whenever 
there 
is 
a 
recommendation 
of 
dissolution 
pursuant 
to 
paragraph 
A, 
the 
board of directors 
shall 
provide the superintendent with a plan of dissolution. 
The 
plan of dissolution must set forth the method and schedule 
for terminating the business of the credit union and may 
provide 
for 
a 
restriction 
on 
withdrawal 
of 
shares 
or 
withdrawal of share certificates. 
Before the 2nd membership 
vote reguired in paragraph A may be taken, the board must 
receive 
the 
superintendent's 
approval 
of 
the 
plan 
of 
dissolution. 
C. 
The superintendent may 
approve the dissolution of 
a 
credit union recommended by a majority of the entire board 
of directors but approved by less than a majority of all 
members if the superintendent finds, upon the written and 
verified application of the board, that: 
(1) 
The board mailed written notice of the meeting to 
consider dissolution to all members gualified to vote; 
( 2) 
The notice disclosed the purpose of the meeting 
and 
that 
approval 
of 
dissolution 
might 
be 
sought 
pursuant to this paragraph; 
(3) 
A majority of the votes cast by the members were 
in favor of dissolution; and 
(4) 
The board has an acceptable plan of dissolution. 
D. 
If the superintendent approves dissolution, either by 
vote of the board or vote of the members, the credit union 
shall immediately cease to 
do 
business, 
except for 
the 
express purposes of liguidation including the discharging of 
debts, collecting on loans, distributing 
assets and every 
other act necessary to wind up and liguidate the business. 
It may sue and be sued for the purpose of enforcing such 
debts and obligations until its affairs are fully adjusted. 
E. 
The board of directors shall use the assets of the 
credit union to pay claims in the following order: 
(1) 
Claimants whose claims are secured must receive 
their security. 
To the extent their respective claims 
exceed the value of the security for those claims, as 
determined to the satisfaction of the receiver, they 
each have an unsecured claim against the credit union 
having priority as provided in subparagraph (2); and 
(2) 
Unsecured claims against the liguidation estate 
that are proved to the satisfaction of the receiver 
have priority in the following order: 
(a) 
Administrative 
costs 
and 
expenses 
of 
liguidation; 
(b) 
Claims 
for 
wages 
and salaries, 
including 
vacation, severance and sick leave pay; 
(c) 
Taxes legally due and owing to the Uni ted 
States or any state or subdivision of the United 
States or state; 
(d) 
Debts due 
and owing to the State and the 
United States, including the National Credit Union 
Administration; 
(e) 
General creditors, and secured creditors to 
the extent that the secured creditors' respective 
claims exceed the value of the security for those 
claims; 
(f) 
Pro 
rata 
distribution 
to 
members 
in 
proportion 
to 
the 
respective 
amount 
of 
their 
deposits and shares; 
(g) 
In 
a 
case 
involving 
liquidation 
of 
a 
corporate credit union, membership capital of the 
corporate credit union; 
(h) 
In 
a 
case 
involving 
liquidation 
of 
q 
designated community development credit union, any 
outstanding 
secondary 
capital 
accounts 
issued 
pursuant to state law; and 
(i) 
In 
a 
case 
involving 
liquidation 
of 
a 
corporate credit union, paid-in capital. 
F. 
Priorities for payment of claims under paragraph E are 
to be based on the circumstances that exist on the date of 
the liquidation. 
G. 
If the repudiation or disaffirmance of any contract or 
lease gives rise to a claim for damages, the claim must be 
considered 
a 
general 
creditor 
claim 
under 
paragraph 
E, 
subparagraph (2), division (e) and not a cost or expense of 
liquidation under paragraph E, 
subparagraph (2), division 
ilh 
H. 
All 
unsecured 
claims 
of 
any 
category 
or 
class 
or 
priority described in paragraph E, subparagraph 2, divisions 
(a) to (i) must be paid in full, or provisions made for such 
payment. before any claims of lesser priority are paid. 
If 
there are insufficient funds to pay all claims of a category 
or class, payment must be made pro rata. 
Notwithstanding 
anthing to the contrary in this section, the receiver may, 
at any time, and from time to time, prior to the payment in 
full of all claims of 
a 
category or class with higher 
priority, make such distributions to claimants in priority 
categories 
described 
in 
paragraph 
E, 
subparagraph 
(2), 
divisions (a) to (e) as the receiver believes are reasonably 
necessary 
to 
conduct 
the 
liquidation, 
as 
long 
as 
the 
receiver determines that adequate funds exist or will be 
recovered during the liquidation to pay in full all claims 
of any higher priority. 
If a surplus remains after making 
distribution in full on all allowed claims described in 
paragraph E, 
subparagraph (2), 
division (a) 
to (i), 
the 
surplus must be distributed pro rata to the credit union's 
members. 
I. 
A credit union liquidating voluntarily may not continue 
in existence 
for 
more 
than 
years 
after 
approval 
of 
dissolution, 
unless 
an 
extension 
is 
granted 
by 
the 
superintendent for good cause shown in an application filed 
prior to expiration of the 3-year period. 
J. 
After all debts, 
liabilities and obligations of the 
credit union are paid or discharged or otherwise adequately 
provided 
for, 
the 
credit 
union 
shall file articles 
of 
dissolution with the Secretary of State where the original 
certificate 
of 
organization 
is 
recorded. 
Articles 
'J'_ 
dissolution must set forth: 
(1) 
The name and address of the credit union; 
( 2) 
The date dissolution was approved; 
( 3 ) 
A statement of how dissolution was approved; 
(4} 
A report of liquidating activities; and 
( 5} 
Such other information as the superintendent may 
require. 
Dissolution 
is 
effective 
upon 
the 
superintendent's 
acceptance of articles of dissolution for filing with the 
bureau, 
after 
recording. 
At 
the 
time 
of 
the 
superintendent's acceptance of the filing, the credit unlon 
ceases to exist, except for the purposes of suits or other 
proceedings provided for by law. 
2. 
Involunta~ dissolution. 
This subsection governs the 
involuntary dissolution of a credit union. 
A. 
If, 
upon 
examination 
of 
a 
credit 
union, 
the 
superintendent determines that the credit union is insolvent 
or that the credit union is operating in an unsafe or 
unsound manner, 
the superintendent may appoint a 
receiver 
who shall proceed to close the credit union. 
The credit 
union shall remain in existence for the purpose of winding 
up its affairs. 
B. 
The person appointed by the superintendent as a receiver 
may be the superintendent. 
a deputy or any other person, 
including the agency insuring the credit union I s 
accounts 
pursuant to section 836. as the superintendent may choose, 
and a certified copy of the order making such an appointment 
is evidence of the appointment. 
The receiver need not post 
a bond. 
The receiver has the power and authority provided 
in this Title and any other powers and authority as may be 
expressed in the order of the superintendent. 
C. 
If the superintendent or a deputy is appointed receiver, 
no additional compensation need be paid, but any reasonable 
and necessary expenses of the superintendent or deputy as 
receiver must be paid by the credit union. 
If another 
person is appointed, then the compensation of the receiver 
must be paid from the assets of that credit union. 
D. 
In the event that the federal agency insuring the credit 
union I s shares or accounts pursuant to section 836 accepts 
an appointment as receiver, the agency shall acquire both 
legal and equitable title to all assets, rights or claims 
and to all real and personal property of the credit union to 
the extent necessary for the agency to perform its duties as 
receiver 
under applicable federal 
law to effectuate the 
appointment. 
If the agency pays or makes available for 
payment the insured share liabilities of a credit union by 
reason of actions taken pursuant to this section, the agency 
is subrogated to the rights of all the members of the credit 
union, whether or not it has become receiver of the credit 
union, in the same manner and to the same extent as it would 
be 
subrogated 
in 
the 
receiverShip 
of 
a 
credit 
union 
operating under a federal charter and insured by the agency. 
E. 
Upon taking possession of the property and business of a 
credit union under this chapter. the receiver: 
(1) 
May collect money due to the credit union and do 
all acts necessary to conserve its assets and business 
and shall proceed to liquidate its affairs: 
(2) 
Shall collect all debts due and claims belonging 
to the credit union and may sell or compound all bad or 
doubtful debts: 
(3) 
May sell. for cash or other consideration or as 
provided by law, 
all or any part of the real 
and 
personal property of the credit union: 
(4) 
May take, 
in the 
name of the credit union, 
a 
mortgage 
on 
the 
real 
property 
from 
a 
bona 
fide 
F. 
pay 
purchaser to secure the whole or part of the purchase 
price; 
(5) 
May 
borrow 
money 
and 
issue 
evidence 
of 
indebtedness for the money. 
To secure the repayment of 
the indebtedness, 
the receiver may mortgage, 
pledge, 
transfer in trust or hypothecate any or all of the 
property of the credit union, whether real, personal or 
mixed, 
superior 
to 
any 
charge 
for 
expenses 
of 
liquidation; and 
(6) 
May represent the credit union in lawsuits under 
the receiver's own name as receiver of the credit union. 
The receiver shall use the assets of the credit union to 
claims in the following order: 
(1) 
Claimants whose claims are secured must receive 
their security. 
To the extent their respective claims 
exceed the value of the security for those claims, as 
determined to the satisfaction of the receiver, they 
each have an unsecured claim against the credit union 
having priority as provided in subparagraph (2); and 
(2) 
Unsecured claims against the liquidation estate 
that are proved to the satisfaction of the receiver 
have priority in the following order: 
(a) 
Administrative 
costs 
and 
expenses 
of 
liquidation; 
(b) 
Claims 
for 
wages 
and 
salaries, 
including 
vacation, severance and sick leave pay; 
(c) 
Taxes legally due and owing to the United 
States or any state or subdivision of the UniteCi 
States or state; 
(d) 
Debts due and owing to the State and the 
United States, including the National Credit Union 
Administration; 
(e) 
General creditors, and secured creditors to 
the extent that the secured creditors' respective 
claims exceed the value of the security for those 
claims; 
(f) 
Pro 
rata 
distribution 
to 
members 
in 
proportion 
to 
the 
respective 
amount 
of 
their 
deposits and shares; 
Page l7-LR1922(1) 
(g) 
In 
a 
case 
involving 
liguidation 
of 
a 
corporate credit union, membership capital of the 
corporate credit union; 
(h) 
In 
a 
case 
involving 
liguidation 
of 
a 
designated community development credit union, any 
outstanding 
secondary 
capital 
accounts 
issued 
pursuant to state law; and 
(i) 
In 
a 
case 
involving 
liguidation 
of 
a 
corporate credit union, paid-in capital. 
G. 
Prior ities for payment of claims under paragraph F are 
based on the circumstances that exist on the date of the 
liguidation. 
H. 
If the repudiation or disaffirmance of any contract or 
lease gives rise to a claim for damages, the claim must be 
considered 
a 
general 
creditor 
claim 
under 
paragraph 
F, 
subparagraph (2), division (e) and not a cost or expense of 
liguidation under paragraph F, 
subparagraph 
(2), division 
~ 
I. 
All 
unsecured 
claims 
of 
any 
category or 
class 
or 
priority 
described 
in 
paragraph 
F, 
subparagraph 
(2), 
divisions (a) to (i) must be paid in fulL or provisions 
made for such payment, before any claims of lesser priority 
are paid. 
If there are insufficient funds to pay all claims 
of 
a 
category or class, 
payment must be made pro rata. 
Notwithstanding anything to the contrary in this section, 
the receiver may, at any time, and from time to time, prior 
to the payment in full of all claims of a category or class 
with higher priority, make such distributions to claimants 
in 
priority 
categories 
described 
in 
paragraph 
F, 
subparagraph 
(2), 
divisions 
(a) 
to 
(e) 
as 
the 
receiver 
believes 
are 
reasonably 
necessary 
to 
conduct 
the 
liquidation, 
as 
long 
as 
the 
receiver 
determines 
that 
adeguate 
funds 
exist 
or 
will 
be 
recovered 
during 
the 
liquidation 
to 
pay 
in 
full 
all 
claims 
of 
any 
higher 
priority. 
If a surplus remains after making distribution in 
full 
on 
all 
allowed 
claims 
described 
in 
paragraph 
F, 
subparagraph (2), divisions (a) to (i), the surplus must be 
distributed pro rata to the credit union's members. 
J. 
After all debts, 
liabilities and obligations of the 
credit union are paid or discharged or otherwise adeguately 
provided 
for, 
the 
receiver 
shall 
file 
articles 
of 
dissolution with the Secretary of State where the original 
certificate 
of 
organization 
is 
recorded. 
Articles 
of 
dissolution must set forth: 
(1) 
The name and address of the credit union; 
(2) 
The date dissolution was ordered; 
(3) 
A statement of how dissolution was ordered; 
(4) 
A report of liquidating activities; and 
(5) 
Such other information as the superintendent may 
require. 
Dissolution 
is 
effective 
upon 
the 
superintendent's 
acceptance of articles of dissolution for filing with the 
bureau after recording. 
At that time 
the credit union 
ceases to exist. except for the purposes of suits or other 
proceedings provided for by law. 
§871-B. 
Applicability of chapter 
Notwithstanding any other provisions of law, the provisions 
of 
this chapter 
apply 
and 
supersede 
the provisions 
of 
laws 
relating to the dissolution, 
merger 
and conversion of credit 
unions organized under the laws of this State. 
Sec. 43. 9-BMRSA§874, as amended by PL 1985, c. 647, §lO, 
is further amended to read: 
§874. Conversion: State to federal charter 
A credit union organized under the general or special laws 
of this State may convert to 
a 
Eeae~ally-eha~~e~ea federally 
chartered credit union. Approval of the members of the credit 
union for the conversion shall must be obtained in the manner set 
forth in section 342, subsection 
~ Q. 
Upon obtaining sHeh the 
approval, the credit union shall provide to the superintendent 
all necessary approvals and charters required by the National 
Credit Union Administration and all federal laws and regulations 
applicable 
~he~e~e to the conversion. The superintendent shall 
notify the Secretary of State that the 
conversion has 
been 
effected. A copy of the approval or charter shall must accompany 
the notification. 
SUMMARY 
The bill makes technical changes to several definitions in 
the Maine banking laws. 
The bill synchronizes the payment of assessments by all 
financial institutions to the Department of Professional 
and 
Financial Regulation, Bureau of Financial Institutions; provides 
consistency with frequency of reports filed; 
removes outdated 
references; 
and provides for 
an increase in the penalty for 
nonpayment of assessments. 
The current penalty of 
$100 
was 
created in 1975. 
All penalties paid would flow to the General 
Fund. 
The bill 
retention 
of 
authorized to 
clarifies that state law governing requirements for 
records 
applies 
to 
banks 
and 
credit 
unions 
do business in this State to the extent that those 
requirements do not contravene existing federal law. 
The 
bill 
clarifies 
the 
Superintendent 
of 
Financial 
Institutions' authority to report violations of the Maine banking 
laws to the Attorney General's office for prosecution on behalf 
of the State. 
The bill makes a technical change to the law restricting the 
use of names of Maine financial institutions on credit cards to 
make it applicable to credit cards underwritten by state and 
federally chartered credit unions in the same fashion that the 
law is applicable to state and federally chartered banks. 
The bill clarifies that those provisions in the banking laws 
governing 
the 
conservation, 
liquidation 
and 
insolvency of 
a 
financial institution supersede any other state statute. 
The bill removes outdated language governing participation 
ln electronic funds transfer systems and the opening, relocating, 
closing or operation of a branch by a state chartered credit 
union. 
The bill clarifies that 
a 
credit 
union that has 
been 
designated a community development credit union under state law 
may impress and enforce a lien on shares and dividends of a 
nonmember to the same extent that the credit union may impress 
and enforce a lien on shares and dividends of a member. 
The bill amends state law to apply general protections to 
accounts held by credit unions. 
The bill gives the superintendent the authority to waive all 
or part of the guaranty fund requirements for individual credit 
unions. 
It adds rule-making authority with which to further 
implement that provision and maintain parity with federal credit 
union law. 
The bill amends outdated laws governing credit union payment 
of dividends and interest on accounts and synchronizes state law 
with federal law in this area. 
outdated reporting 
requirement 
an 
outdated 
provision 
for 
into 
the state 
requirement 
The bill 
removes 
an 
credit 
unions 
and 
repeals 
transition of credit unions 
insurance of accounts. 
for 
the 
for 
The bill adds a specific requirement that a credit union 
board of directors establish a written loan policy and written 
investment 
policy 
and 
modifies 
several 
outdated 
provisions 
relating to the establishment of a supervisory committee or a 
credit committee. 
It also repeals an outdated law that prohibits 
a credit union director from acting as a surety or comaker on any 
loan. 
The bill clarifies the duties and responsibility of a credit 
union supervisory committee or 
independent public accountant. 
The bill also requires a credit union over $50,000,000 in assets 
to 
employ 
an 
independent public accountant 
and provides 
the 
superintendent with rule-making authority to further define the 
duties 
of 
the 
supervisory 
committee 
or 
independent 
public 
accountant. 
The bill repeals outdated provisions in 
powers and duties of credit committees or 
credit union. 
state law governino 
loan off icers of 
0. 
The bill amends outdated provisions for credit union members 
to call a special meeting of the board of directors and brings it 
into alignment with federal law in that area. 
The bill clarifies the lending powers of a credit union, 
repeals 
the 
outdated 
provisions 
relating 
to 
mortgage 
loc.n 
application, inserts statutory provisions that require a credit 
union 
to 
establish 
a 
written 
loan 
policy, 
and 
gives 
the 
superintendent rule-making authority to further regulate lending 
activities by credit unions. 
The 
bill 
requires 
a 
credit 
union 
investment policy and removes an outdated 
defunct Federal Savings and Loan Insurance 
credit union law. 
to 
have 
a 
written 
reference to the 
nOvT 
Corporation found in 
The bill repeals outdated language governing voluntary or 
involuntary dissolution of a credit union and replaces it with 
the more modern approach that is consistent with the process 
followed by the National Credit Union Administration, the federal 
agency that insures all accounts of each credit union doing 
business in Maine. 
The bill corrects an outdated reference in the credit union 
conversion statutes.