17-2206.   Supervision by administrator; reports,plans and programs;penalties; examination, fees.(a) Credit unions shall be subject to the exclusive supervision of theadministrator and shall makeand keep current such books and records, prepare reports and establish plansand programs concerning the safety and soundness of the credit union asmay be required by rules and regulations adopted by the administratorandshall makea report of condition to the administratorat least semiannually, on blank forms to be supplied by theadministrator, notice of which reportsshall be sent out by the administrator. Returns shall be verified underoath of the president or chairperson of the board, whichever has been electedby the board of directors pursuant to K.S.A. 17-2209, and amendmentsthereto, and treasurer, and additional reports may berequired by the administrator. Copies of a current balance sheet shallbe furnished without charge by the administrator to any person uponrequest. Any credit union which neglects to make the above reports shallforfeit to the treasurer of the state up to $50 for eachday of such neglect at the discretion of the administrator.

      (b)   Each credit union shall be examined at least onceevery 18 months by theadministrator or the administrator's duly authorized deputy or agent.In lieu of any particular examination, the administrator mayaccept an examination report made by or under the authority of thenational credit union administration or its successor or successors, byany such other appropriate federal agency or by an independent auditoror certified public accountant licensed to do business in the state ofKansas if such audit and report meet the standards which theadministrator may by regulation promulgate. The administrator mayorder other examinations, and the administrator's agents shall at alltimes be given free access to all books, papers, securities and othersources of information in respect to the credit union. The administrator shallhave the powerto subpoena witnesses, compel their attendance, require the production ofevidence, administer oaths andexamine any person under oath in connection with any subject relating to aduty imposed upon or a power vested in the administrator. If a credit unionneglects to make therequired reports or to pay the charges required, includingcharges for delay in filing reports, for 15 days, theadministrator shall notify the credit union of the administrator'sintention to revoke the certificate of approval. If the neglect orfailure continues for another 15 days, the administrator mayrevoke the certificate of approval and shall cause one of theadministrator's agents to take possession of the business of such creditunion and retain possession until such time as the administrator maypermit such credit union to resume business or its affairs are finallyliquidated.

      (c)   The administrator may issue cease and desist orders or orders forcorrective action or both, made over theadministrator's official signature, having determinedthat a credit union is engaged, has engaged, or isabout to engage, in an unsafe or unsound practice, or is violating, hasviolated, or is about to violate, any law, rulesand regulations or any condition imposed in writing by the administrator orany written agreement made with the administrator.

      (d)   If the administrator determines that a credit union is insolvent,is in a deteriorating condition, as defined in rules and regulationspromulgated by the administrator, or, within a reasonabletime, has failed to comply with any order mailed to the last address filedby the credit union with the administrator, the administrator, as conservatoror liquidating agent, pursuant to any order shallimmediately, or within a reasonable time thereafter, take possession ofor appoint an agent to take possession of the business and property ofthe credit union and retain possession, as conservator or as liquidatingagent, until such time as theadministrator may permit it to resume business or its affairs arefinally liquidated.

      (e)   The administrator may approve an emergency merger in accordancewithK.S.A. 17-2228, and amendments thereto, without regard to field of membershipor other legalrestraints. The creditunion to be merged shall have a current CAMEL rating of 4 or 5, or therecognized regulatoryequivalent thereof as defined in rules and regulations promulgated by theadministrator, and bedetermined to be undercapitalized in accordance with regulatory standards asdetermined by theadministrator by rules and regulations. The field of membership of the mergedcredit union willbe retained by the continuing credit union resulting from the merger.

      (f)   Each credit union shall pay to the administrator a feeforexamination, established in accordance with this subsection. Prior to June1 of each year, the administrator, after advisingthe credit unioncouncil,shall establish such annual fees as the administrator determines to besufficientto meet the budget requirements of the department of credit unions for thefiscal year beginning July 1. Such fees shall be due and payable 30days after receipt of billing from the department of credit unions.

      (g)   For a corporate creditunion, the administrator may accept an audit report bya certified public accountant in lieu of the credit union departmentalexamination of such credit union. If the administrator acceptsa certified public accountant audit in lieu of the administrator'sexamination ofsuch corporate credit union, the administrator may assesssuch corporatecredit union a feeestablished in accordance with subsection (f).

      (h)   All administrative proceedings instituted or conductedby theadministrator pursuant to this act shall be conducted in accordance with theKansas administrative procedure act, K.S.A. 77-501 et seq., andamendments thereto.

      (i)   The administrator, as conservator or liquidating agent:

      (1)   By operation of law, shall succeed to all rights, titles, powers andprivileges of the credit union, and of any member, account holder, officer ordirector of such credit union with respect to the credit union and the assetsof the credit union;

      (2)   shall take over the assets of and operate the credit union with allthe powers of the members or shareholders, the directors and the officers ofthe credit union and shall be authorized to conduct all business of the creditunion;

      (3)   may collect all obligations and money due the credit union;

      (4)   may perform all functions of the credit union in the name of thecredit union which is consistent with the appointment as conservator orliquidating agent;

      (5)   shall preserve and conserve the assets and property of such creditunion;

      (6)   may fix a reasonable amount for compensation of the conservator orliquidating agent as an expense of operation or liquidation of the creditunion;

      (7)   may take such actions as may be necessary to put the credit union in asound and solvent condition;

      (8)   may take such action as may be appropriate to carry on the business ofthe credit union and preserve and conserve the assets and property of thecredit union; and

      (9)   as liquidating agent, place the credit union in liquidation andproceed to realize upon the assets of the credit union and liquidate suchcredit union in accordance with the provisions of K.S.A. 17-2230, andamendments thereto.

      (j)   A credit unionapproved to do business in this state under K.S.A.17-2223a, and amendments thereto,shall pay to the administrator the same feesfor examination that a state-chartered credit union is required to pay underthe provisions of subsection (f). Such fees shall be paid inaccordance with the provisions of subsection (f).

      History:   L. 1929, ch. 141, § 6; L. 1933, ch. 154, § 1; L.1949, ch. 190, § 1; L. 1955, ch. 138, § 2; L. 1957, ch. 152, § 1; L.1959, ch. 118, § 1; L. 1963, ch. 140, § 1; L. 1966, ch. 33, § 1(Budget Session); L. 1968, ch. 160, § 4; L. 1972, ch. 59, § 1; L.1975, ch. 136, § 5; L. 1976, ch. 106, § 1; L. 1977, ch. 76, § 1;L. 1980, ch. 79, § 1; L. 1980, ch. 270, § 3; L. 1982, ch. 102, § 2;L. 1987, ch. 86, § 1;L. 1992, ch. 225, § 2;L. 1995, ch. 128, § 2;L. 2005, ch. 36, § 1;L. 2008, ch. 81, § 3; July 1.