2023 Laws of Puerto Rico › TITLE SEVEN - Banking (§§ 1 — 3116) › PART III - Other Financial Institutions (§§ 551 — 1390) › Chapter 86 - Cooperative Savings and Credit Associations Act of 2002 (§§ 1361 — 1371b) › Subchapter IV - Members (§§ 1364 — 1364f) › § 1364e - Causes and procedures—Removal of members

Members of a cooperative can be removed and deprived of their rights therein when they incur one or more of the following causes:
(a) Perform acts for which the cooperative is bound to file a claim pursuant to the fidelity bond;
(b) are delinquent in the payment of loans that have been granted to them and the cooperative has been compelled to resort to the guarantor of the loan, or to any legal action or resource to recover the same;
(c) issue, collect, or have collected fraudulent or bad checks through the cooperative; or with insufficient funds for their payment;
(d) act against the best interests, goals, and purposes of the cooperative;
(e) incur violations of the laws and regulations that govern cooperatives;
(f) intentionally or negligently, and in the context of his/her relationship with the cooperative, make any statement that is false or deceitful in any material aspect, at the moment and in view of the circumstances under which it is made, that provokes or could provoke losses to the cooperative;
(g) intentionally or negligently, and in the context of his/her relationship with the cooperative, fail to consign [sic] a material fact needed to prevent that a statement become false or deceitful at the moment and in view of the circumstances under which it is made in any material aspect, that provokes or could provoke losses to the cooperative, and
(h) violate an order of the cooperative.
When the Board determines that it is pertinent to act to separate a member from membership in the cooperative, it shall notify the member thus affected, by certified mail, specifying the reasons for it. In said notice, it shall inform the member in question of his/her right to an administrative hearing, which shall be held no later than thirty (30) days following the date the notice issued by the Board is received.
The member thus affected, may attend the hearing in person, or assisted by counsel, and shall have the right to examine the evidence against him/her, cross-examine witnesses, and present evidence in his/her favor. The Board shall evaluate the evidence presented, issue its decision within fifteen (15) days following the date that the administrative hearing is concluded, and shall notify it to [sic] the party in question by certified mail, within five (5) days following the date it issued its decision. Every decision of the Board to separate a member of the cooperative shall be effective as of the date of the notice to the person thus affected.
The decisions of the Board to separate a member of the cooperative from membership thereof, may be appealed before an arbitration panel as provided in Section 7.07 of this Act. However, any member that is separated from the membership of a cooperative shall be liable for any debt or obligation that he/she may have pending with it on the date of his/her separation.
The persons who are separated from a cooperative for the causes established in this section may again associate with the same, or another cooperative, when there is attesting evidence, to the satisfaction of the Board, that they have overcome or compensated for the circumstances that gave rise to the separation. Every member of a cooperative that avails him/herself of the Bankruptcy Law must meet the requirements established in said Act before being able to reacquire his/her capacity to assume debts therein.
History —Oct. 28, 2002, No. 255, § 4.06.