6-501

6-501. Definitions

A. In this chapter, unless the context otherwise requires:

1. "Branch office" means a place of business of a credit union, other than a
principal office, at which deposits are received and checks are paid, but does not
include premises used for computer operations, record keeping, accounting, storage,
maintenance or other administrative or service functions.

2. "Capital" means share accounts, reserves and undivided earnings.

3. "Corporate credit union" means a credit union whose field of membership consists
of other credit unions and organizations or associations owned by or composed of credit
unions and corporations or associations which primarily serve credit unions.

4. "Credit union" means a cooperative nonprofit association which is incorporated
under this chapter for the purposes of encouraging thrift among its members and creating
a source of credit and other financial services at fair and reasonable cost.

5. "Deposit account" means a balance other than a share account held by a credit
union including balances designated as special investment accounts, deposits,
certificates of deposit, certificates of indebtedness, demand deposit accounts or other
similar names.

6. "Fixed asset" means land, buildings and major equipment used by a credit union
in the provision of services.

7. "Governmental unit" means a board, agency, department, authority,
instrumentality or other unit or organization of the federal, state, county, municipal or
other level of government.

8. "Immediate family" means persons related by blood or marriage and includes
foster and adopted children.

9. "Insolvent" means that the value of a credit union's assets is less than its
liabilities.

10. "Insuring organization" means the national credit union administration or
successor organization or any other equivalent insurer approved by the superintendent.

11. "Membership share" means a balance held by a credit union and established by a
member according to the standards prescribed by the credit union.

12. "Organization" means any corporation, association, partnership, society, firm,
syndicate, trust or other legal entity.

13. "Reserves" means allocations of retained income and includes regular and special
reserves and any allowances for loan losses and investment losses.

14. "Risk assets" includes all assets of the credit union except the following:

(a) Cash on hand.

(b) Deposits or shares in federally or state insured banks, savings and loan
associations and credit unions which have a remaining maturity of five years or less or
if the maturity is greater than five years, the asset is being carried on the credit
union's records at the lower of cost or market or is being marked to market value
monthly.

(c) Assets which have a remaining maturity of five years or less and are insured
by, fully guaranteed as to principal and interest by or due from the United States
government, its agencies, the federal national mortgage association, the federal home
loan mortgage corporation or the government national mortgage association including
collateralized mortgage obligations which are comprised of government guaranteed mortgage
loans or if the maturity is greater than five years, the asset is being carried on the
credit union's records at the lower of cost or market or is being marked to market value
monthly.

(d) Loans to other credit unions which have a remaining maturity of five years or
less or if the maturity is greater than five years, the asset is being carried on the
credit union's records at the lower of cost or market or is being marked to market value
monthly.

(e) Student loans insured under the provisions of title IV, part B of the higher
education act of 1965 (20 United States Code section 1071, et seq.) or similar state
insurance programs which have a remaining maturity of five years or less or if the
maturity is greater than five years, the asset is being carried on the credit union's
records at the lower of cost or market or is being marked to market value monthly.

(f) Loans which have a remaining maturity of five years or less and are fully
insured or guaranteed by the federal or state government or an agency of either or if the
maturity is greater than five years, the asset is being carried on the credit union's
records at the lower of cost or market or is being marked to market value monthly.

(g) Shares or deposits in a central or corporate credit union which have a
remaining maturity of five years or less or if the maturity is greater than five years,
the asset is being carried on the credit union's records at the lower of cost or market
or is being marked to market value monthly.

(h) Common trust investments, including mutual funds, which deal exclusively in
investments authorized by the federal credit union act and are either carried at the
lower cost or market or are marked to the market value monthly.

(i) Prepaid expenses.

(j) Accrued interest on nonrisk investments.

(k) Loans fully secured by a pledge of shares in the lending federal credit union
equal to and maintained to at least the amount of the loan outstanding.

(l) Loans that are purchased from liquidating credit unions and guaranteed by the
national credit union administration.

(m) National credit union share insurance fund guaranty accounts established with
the authorization of the national credit union administration under the authority of
section 208(a)(1) of the federal credit union act.

(n) Investments in shares of the national credit union administration central
liquidity facility.

(o) Fixed assets as defined in section 701.36(b) of the federal credit union act.

(p) Deposits in the national credit union share insurance fund representing a
federally insured credit union's capitalization account balance of one per cent of
insured shares.

15. "Share account" means a balance held by a credit union and established by a
member according to this chapter, including balances designated as shares, share
certificates, share draft accounts and membership shares. Ownership of a share account
confers membership and voting rights and represents an interest in the capital of the
credit union.

B. For the purposes of subsection A, paragraph 14, subdivision (g), a "central or
corporate credit union" means a credit union whose membership primarily consists of
either:

1. Other credit unions organized under state or federal law.

2. Officials, committee members and employees of any credit union organized under
state or federal law.

3. Any combination of the categories described in paragraphs 1 and 2 of this
subsection.