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§ 7-216. Guaranty fund requirements

West's Annotated Code of MarylandFinancial Institutions

West's Annotated Code of Maryland
Financial Institutions
Title 7. Credit Union Share Insurance
Subtitle 2. Credit Union Share Guaranty Corporations (Refs & Annos)
MD Code, Financial Institutions, § 7-216
§ 7-216. Guaranty fund requirements
Currentness
In general
(a)(1) Except as provided in paragraph (2) of this subsection, a credit union share guaranty corporation shall establish and maintain a guaranty fund of at least 1 percent of the aggregate shares and deposits of the participating credit unions.
(2) A credit union share guaranty corporation that is domiciled outside the State may maintain a guaranty fund at the level permitted by its state of domicile if the credit union share guaranty corporation:
(i) Has been domiciled in that state for at least 25 years immediately preceding the date of the credit union share guaranty corporation's completed application for a certificate of authority;
(ii) Has engaged in the credit union share guaranty business for at least 25 years immediately preceding the date of the credit union share guaranty corporation's completed application for a certificate of authority; and
(iii) The business of the credit union share guaranty corporation is subject to regulation by its state of domicile.
Contents of guaranty fund
(b) The guaranty fund shall be composed of the following:
(1) The account for each participating credit union;
(2) Retained earnings; and
(3) Any reserves established under § 7-217 of this subtitle.
Amount of account carried as asset
(c) The amount of the account of each participating credit union shall be carried on the books of the participating credit union as an asset.
Additional capital contributions
(d) Notwithstanding any other provision of this subtitle, a credit union share guaranty corporation may require a participating credit union to make additional capital contributions to maintain the normal operating level during any calendar year in which the fund has been reduced below the minimum operating level as a result of payment of any deficiencies in credit union share accounts.
Report filed with Commissioner
(e) Within 60 days of the assessment, a credit union share guaranty corporation shall file with the Commissioner a report of each capital contribution that the credit union share guaranty corporation requires under subsection (d) of this section.
Failure to pay annual capital contribution, premium, fee, or assessment
(f)(1) If a participating credit union fails to pay an annual capital contribution, premium, fee, or assessment when due, the credit union share guaranty corporation:
(i) Within 10 days after the failure, shall report the failure in writing to the Commissioner; and
(ii) After 30 days' notice, may revoke the participating credit union's participation in the credit union share guaranty corporation, unless good cause is shown for the failure.
(2) The 30-day notice of revocation required under paragraph (1)(ii) of this subsection does not apply to the revocation of excess coverage.
Refunds to participating credit union
(g)(1) Subject to the provisions of paragraph (2) of this subsection, a credit union share guaranty corporation shall refund to a participating credit union an amount equal to the balance of the participating credit union's capital contribution account, less any outstanding debts owed to the credit union share guaranty corporation, if the participating credit union:
(i) Voluntarily dissolves;
(ii) Obtains primary share guaranty insurance from the National Credit Union Administration Share Insurance Program or another credit union share guaranty corporation regulated under this subtitle; or
(iii) Merges or consolidates with another credit union that results in the share and deposit accounts of the surviving or new credit union being insured by the National Credit Union Administration Share Insurance Program or another credit union share guaranty corporation regulated under this subtitle.
(2) A credit union share guaranty corporation shall make a refund under paragraph (1) of this subsection only if the guaranty fund equals or exceeds the guaranty fund's normal operating level as calculated without the account of the exiting credit union.
Merger or consolidation of participating credit unions
(h) If two or more participating credit unions merge or consolidate and the surviving or new credit union is to be insured by the credit union share guaranty corporation, the funds in the capital contribution account of each credit union shall be transferred to the account of the surviving or new credit union, less any outstanding debts owed to the credit union share guaranty corporation.
Net assets of dissolved corporation
(i) If a credit union share guaranty corporation is dissolved, the net assets after paying all liabilities and all costs of dissolution shall be distributed to the participating credit unions in accordance with their share and deposit balances, less any outstanding debts owed to the credit union share guaranty corporation.

Credits

Added by Acts 2002, c. 540, § 1, eff. July 1, 2002. Amended by Acts 2003, c. 21, § 1, eff. April 8, 2003.
MD Code, Financial Institutions, § 7-216, MD FIN INST § 7-216
Current through legislation effective through May 9, 2024, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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