The Florida Senate

657.258  Powers and duties of the corporation; assessments; loss reserves.--

(1)  The corporation shall, in addition to the powers and duties enumerated in other sections of this part:

(a)  Be obligated to the extent of the covered claims existing as of the date that a member credit union adopts a resolution of voluntary liquidation, or as of the date the department enters the order that a member credit union be placed in involuntary liquidation, but such obligation shall include only that amount of each covered claim which is not greater than the maximum amount established by the corporation, which maximum amount shall in no event be less than $40,000.

(b)  Be deemed the guarantor to the extent of its obligation on covered claims and, to such extent, shall have all of the rights, duties, and obligations of the insolvent credit union as if the credit union had not become insolvent.

(2)  The corporation may:

(a)  Employ or retain such persons as are necessary to handle claims and perform other duties of the corporation.

(b)  Borrow funds necessary to effect the purposes of this act in accordance with the plan of operation.

(c)  Sue or be sued.

(d)  Negotiate, and become a party to, such contracts as are necessary to carry out the purposes of this act.

(e)  Adopt, use, and display a corporate seal.

(f)  Advance funds, with or without interest, in accordance with agreed terms and conditions to aid member credit unions to continue to operate and to maintain solvency or to maintain account balances with a financial institution in connection with the assumption of receivables from a member credit union, or to provide liquidity for payment of shares and deposits following a determination of voluntary or involuntary liquidation.

(g)  Upon the written request of the department, assume control of the property, assets, and business of any member credit union and operate the credit union in accordance with the recommendations of the department. The corporation shall have all the powers, duties, and authorities of the board of directors of such credit union, specifically including the power and authority to elect or designate directors, officers, and committee members, who need not be members of the member credit union, to sell assets, and to terminate and employ personnel for the credit union.

(h)  Assist in the merger, consolidation, or liquidation of credit unions with written notice to the department. In the event of liquidation of a member credit union that has not received a certificate of insurance through the National Credit Union Administration, whether voluntary or involuntary, the corporation must be designated as the liquidating agent and, as such, the corporation shall have all the duties, powers, and authorities of the board of directors of such liquidating credit union, specifically including, but not limited to, the power and authority to elect and designate directors, officers, and committee members, who need not be members of the credit union; to sell assets; and to terminate and employ personnel for the liquidating credit union. The corporation shall have the right and authority to participate in negotiations for any contemplated merger, consolidation, or liquidation of a member credit union and to approve the terms of any sales of assets in order to minimize potential loss which might result in a covered claim to be paid by the corporation.

(i)  Receive money or other property from its member credit union or from any corporation, association, or person.

(j)  Invest its funds in bonds, notes, securities, obligations, participations, or other instruments of, issued by, or fully guaranteed as to principal and interest by, the United States Government or any agencies thereof, or in any trust or trusts established for investing directly or collectively in the same, and in such other investments, other than investments in credit unions which are members of the corporation, as are deemed prudent by the directors, but these other investments shall not exceed 25 percent of the funds of the corporation.

(k)  Purchase in its own name, hold, and convey property of any nature.

(l)  Receive by assignment or purchase from its member credit unions any property of any nature owned by those member credit unions, including securities.

(m)  Sell, assign, mortgage, encumber, or transfer property of any nature.

(n)  Adopt and amend a plan of operation and bylaws for carrying out the purposes of this part.

(o)  Purchase or acquire by assignment loans due and owing to credit unions, along with the right to receive payments thereon.

(p)  Pay dividends to member credit unions.

(q)  Have access to and make audit or examination of all records and information concerning the affairs of a member credit union.

(r)  Pledge or advance funds, or enter into agreements with the National Credit Union Administration, notwithstanding any other provisions of this part, and may otherwise provide assistance to enable member credit unions to qualify for a certificate of insurance through the National Credit Union Administration, if the action would not preclude the corporation from meeting its current and future obligations under this part.

(3)  To obtain funds for the fulfillment of the purposes of the corporation, for the provision of reserves for the protection of potential claimants, and for the payment of costs of operating the corporation, the corporation shall be authorized and empowered to levy and collect from member credit unions fees and assessments as follows:

(a)  The corporation shall levy and collect from each member credit union that has not received a certificate of insurance through the National Credit Union Administration an annual growth fee in an amount equal to 0.5 percent of the annual increase in its guaranteed shares and deposits as determined as of December 31 of each year.

(b)  In addition to the fees set forth above, the corporation may levy and collect a uniform annual assessment from each member credit union that has not received a certificate of insurance through the National Credit Union Administration in an amount to be determined by the board of directors not to exceed 0.05 percent of its guaranteed shares and deposits determined as of December 31 of the preceding year.

(c)  In addition to the fees and annual assessment, the corporation, in the event of potential impairment of the corporation's capital assets, may levy and collect from the member credit unions uniform special assessments in amounts to be determined by the board of directors, subject to approval by the department. If the board of directors determines that a special assessment is necessary, then such determination shall be submitted in writing to the department, and the special assessment shall be approved, modified, or disapproved within 60 days after it is received by the department.

(d)  The initial membership fee and the growth membership fee shall be considered as an investment of the member credit union in the corporation. Such investment shall not be transferable except to another member credit union as a result of a merger approved by the department; and, in such event, the amount of such investment which may be transferred to the acquiring credit union shall not exceed 0.5 percent of the guaranteed shares and deposits of the acquired member credit union as of the preceding December 31 or the date of merger, whichever amount is the lower.

(e)  Annual and special assessments hereunder shall be considered as a payment by the member credit union into the loss reserve to be maintained by the corporation. Each payment by member credit unions after 1983 shall be retained by the corporation as a permanent part of its working capital and the funds received by the corporation shall be restricted to use as part of the loss reserve. The interest of each member credit union in the balance of the loss reserve shall be proportionate according to the amount paid in by all member credit unions which are members of the corporation on April 18, 1991. Such interest in the loss reserve shall not be transferable, except to another member credit union as a result of a merger approved by the department and shall be applied in the calculation of any amount of any refund to be made to each member credit union under s. 657.269

(f)  The total amount paid in by each member credit union as its investment in the corporation and the amount paid into the loss reserve must be determined as of April 18, 1991. The interest of each member credit union in the corporation must be proportionate according to the total amount paid in by all member credit unions as of April 18, 1991. The proportion thus determined must be applied in the calculation of the amount of any refund to be made to each member credit union under s. 657.269

(g)  All fees and assessments shall be paid in the manner established by the plan of operation.

(h)  In the event the assets of the corporation fall below 0.5 percent of the total aggregate guaranteed shares and deposits of all member credit unions which have not received certificates of insurance through the National Credit Union Administration, the corporation may determine the proportionate amount of the reduction of the investment of each member credit union, and this amount shall be transferred from membership fees to the loss reserve and shall be considered as the payment of a special assessment by each member credit union.

(i)  Upon written application, the corporation, for good cause shown, may exempt or defer any member credit union from an assessment if such assessment would result in such credit union being forced into insolvency, liquidation, or an unsound financial condition.

(j)  No state funds of any kind shall be allocated or paid to the corporation.

(4)  The corporation shall, upon proper verification, as provided by the plan of operation, reimburse a member credit union for necessary and proper expenses incurred by the member credit union in the investigation, adjustment, compromise, settlement, denial, or handling of covered claims at the request of the corporation.

(5)  The corporation shall maintain a loss reserve to provide assurances that funds will be available for potential claimants and for the fulfillment of the purposes of the corporation.

(a)  There shall be credited to the loss reserve:

1.  Payments by member credit unions of annual and special assessments.

2.  Amounts transferred from the membership fees account to the loss reserve.

3.  Amounts invested by members which are not refundable upon withdrawal of such members.

4.  Annual net income of the corporation for each year, unless at the end of the year the balance of the loss reserve is greater than 1 percent of the aggregate of all guaranteed shares and deposits of all then-member credit unions.

5.  Recoveries of the amounts previously charged against the loss reserve.

(b)  There shall be charged against the loss reserve:

1.  Amounts paid as covered claims in excess of current net income and accumulated retained earnings.

2.  Advances to member credit unions which are determined to be uncollectible and which exceed current net income.

3.  Refunds to withdrawing members of interest in the loss reserve.

4.  Annual net loss of the corporation for each year in excess of the accumulated retained earnings from prior years.

History.--s. 10, ch. 74-183; s. 3, ch. 76-168; s. 1, ch. 77-174; s. 1, ch. 77-457; s. 7, ch. 78-123; ss. 4, 6, ch. 80-258; ss. 2, 3, ch. 81-318; s. 1, ch. 84-74; ss. 19, 51, ch. 84-216; ss. 23, 58, ch. 85-82; ss. 4, 11, 12, ch. 91-17; ss. 1, 3, ch. 91-307; s. 4, ch. 91-429.