2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 17 - CREDIT UNIONS › Chapter 5 - Corporate Powers, Duties and Safeguards › Section 503 - Regulation by department

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