17-2242.   Administrator's jurisdiction.(a) If it appears to the administrator that the board of directors,supervisory or credit committees, of any credit union has been dishonest,reckless or incompetent in the performance of their duties, theadministrator: (1) Mayrecommend the removal of such persons; and (2) may submit any such findings,reports or recommendations to any regularly or specially called meeting ofthe board of directors, credit and supervisory committees or, ifthe administrator has donethis, after due notice given at least10 days in advance,may submit the administrator's findings and recommendationsand reports to a general meeting ofthe shareholders. Due notice shall be construed as being such notice as isprovided in the bylaws of the credit union for calling such meetings. Theadministratormay give such additional notice to the members as the administratordeems advisable. The administrator and employees shall not bepersonally liable for such reports, recommendations and findings made ingood faith. At any such meeting of the shareholders it shall be in order tocall for a vote to remove such officers, board members, committee members,or employees. Such action by the shareholders to remove or not remove suchpersons from their positions shall be absolute and need not be based on anyfinding, concurrence or nonagreement with the administrator that suchpersons are or have been dishonest, reckless or incompetent in theperformance of their duties. At any such meeting of the shareholders theboard of directors, supervisory or credit committees may concur or notconcur with a recommendation of removal whether or not they agree with thefindings of the administrator.

      (b)   As an alternative to and notwithstanding subsection (a), theadministratormay suspend from office and prohibit from further participation in any mannerin the conduct of the affairs of a credit union any director, officer,committeemember or employee who has committed any violation of a law, rules andregulationsor of a cease and desist order or who has engaged or participated in anyunsafe or unsound practice in connection with the credit union or who hascommitted or engaged in any act, omission or practice which constitutesa breach of that person's fiduciary duty as such director, officer, committeemember or employee, when the administrator has determinedthat such action or actions have resulted or will resultin substantial financial loss or other damage that seriously prejudicesthe interests of the members. The credit union board of directors orindividuals named in the administrative actionshall be given a hearing or anopportunity for a hearing in accordance with the provisions of the Kansasadministrative procedures act.

      History:   L. 1968, ch. 160, § 28;L. 1987, ch. 86, § 5;L. 1992, ch. 225, § 21;L. 2007, ch. 187, § 1; July 1.