Bill Text: VA HB1205 | 2024 | Regular Session | Prefiled
Bill Title: Public deposits; credit unions.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced) 2024-02-01 - Failed to report (defeated) in Labor and Commerce (9-Y 13-N) [HB1205 Detail]
Download: Virginia-2024-HB1205-Prefiled.html
Be it enacted by the General Assembly of Virginia:
1. That §§2.2-1802, 2.2-1803, 2.2-1810, 2.2-1813, 2.2-1814, 2.2-1816, 2.2-1818, 2.2-4401, 2.2-4405, 6.2-1302, 6.2-1327, and 58.1-3149 of the Code of Virginia are amended and reenacted as follows:
§2.2-1802. Payment of state funds into state treasury; deposits in state depositories; credit of fund not paid into general fund; exceptions as to endowments and gifts to institutions; appropriations by federal government.
Every state department, division, officer, board, commission, institution or other agency owned or controlled by the Commonwealth, whether at the seat of government or not, collecting or receiving public funds, or moneys from any source, belonging to or for the use of the Commonwealth, or for the use of any state agency, shall hereafter pay the same promptly into the state treasury. All fees of office and commissions accruing to the State Treasurer shall be paid into the state treasury.
Any state department, division, officer, board, commission, institution or other agency at the seat of government shall deposit such moneys to the credit of the State Treasurer upon communicating with him and receiving instructions from him as to what state depository may be used for the purpose. In every such case the depositor shall retain a deposit receipt or a deposit certificate form certified by the bank or credit union receiving the deposit for every such deposit to the State Treasurer and send to the Comptroller a copy of the deposit receipt, certificate, or other documentation supporting the deposit, as prescribed by the Comptroller.
Any state department, division, officer, board, commission,
institution or other agency not at the seat of government, other than county
and city treasurers and clerks of courts, depositing such moneys to its or his
credit in a local banks bank or credit union shall
deposit such moneys to the credit of the State Treasurer in a state depository
duly designated in accordance with this chapter, and in every such case the
depositor shall retain a deposit receipt or a deposit certificate form
certified by the bank or credit union
receiving the deposit for every deposit to the State Treasurer and send to the
Comptroller a copy of the deposit receipt, certificate, or other documentation
supporting the deposit, as prescribed by the Comptroller. Moneys deposited into
such state depositories shall be transferred to a concentration bank depository
institution as prescribed by the State Treasurer.
Moneys paid into the state treasury that are not now payable into the general fund of the state treasury shall be placed to the credit of the respective accounts that are required by law to be kept on the books of the Comptroller or to the credit of new accounts to be opened on the books of the Comptroller with such agencies so paying such moneys into the state treasury, respectively.
This chapter shall not apply to the endowment funds or gifts to institutions owned or controlled by the Commonwealth, or to the income from such endowment funds or gifts, or to private funds belonging to the students or inmates of state institutions. The cash as well as the notes of student loan funds shall be held by the respective institutions.
Appropriations made by the government of the United States to or for the benefit of any state institution or agency, however, shall be paid into the state treasury and used for the purposes for which such appropriations were made.
§2.2-1803. State Treasurer; regulation procedures for depositing money.
The State Treasurer may adopt regulations or other directives
establishing procedures for depositing moneys in depository
banks state depositories
and for reporting the deposits. The regulations may address, by way of
explanation and not limitation: (i) the form of the required reports; (ii) the
frequency of reports and deposits; (iii) the disposition of checks; and (iv)
the establishment of banking depository relationships. All
agencies and entities depositing moneys to the credit of the Treasurer of
Virginia, including judicial and legislative service agencies, clerks of court,
local treasurers or other officials performing similar duties, and political
subdivisions, shall comply with the State Treasurer's regulations or other
directives.
§2.2-1810. State Treasurer to keep accounts with depositories.
The State Treasurer shall keep accounts on the books of his
office with the different depositories, on which accounts balances shall be
struck monthly, showing the amount in bank depository institutions to the
credit of the State Treasurer at the end of each month.
§2.2-1813. Deposits in banks, credit unions, and savings institutions designated as state depositories.
Moneys to be paid into the state treasury shall be deposited in the banks, credit unions, and savings institutions designated as state depositories by the State Treasurer.
§2.2-1814. Amount and time limit of deposits.
The State Treasurer may arrange for and make state deposits in such amounts and for such time as in his judgment the condition of the state treasury permits; however, no state deposit shall be made for a period in excess of five years. The money deposited in a bank, credit union, or savings institution in excess of the amount insured by the Federal Deposit Insurance Corporation, National Credit Union Administration, or other federal insurance agency shall be fully collateralized by eligible collateral as defined in §2.2-4401.
§2.2-1816. How public moneys transferred to depositories.
All transfers of public moneys from one depository to another for any purpose shall be made by electronic funds transfer at the direction of the State Treasurer or his duly authorized deputies who shall order the transferor bank, credit union, or savings institution to make payment to the transferee bank, credit union, or savings institution for deposit to the credit of the State Treasurer.
§2.2-1818. Responsibility of Commonwealth for securities deposited with Commonwealth Transportation Board.
The Commonwealth shall be responsible for the safekeeping of all bonds or other securities deposited with the Commissioner of Highways or the Commonwealth Transportation Board as surety on account of funds deposited in banks, credit unions, or savings institutions by division engineers of the Department of Transportation. If such bonds or securities or any of them are lost, destroyed, or misappropriated, the Commonwealth shall make good such loss to the bank, credit union, or savings institution making the deposit of its bonds or other securities.
Upon the closing of accounts of district engineers with banks, its bonds and other securities then on deposit shall be returned to the bank.
§2.2-4401. Definitions.
As used in this chapter, unless the context requires a different meaning:
"Dedicated method" or "opt-out method" means the securing of public deposits without accepting the contingent liability for the losses of public deposits of other qualified public depositories, pursuant to §2.2-4404 and regulations and guidelines promulgated by the Treasury Board.
"Defaulting depository" means any qualified public depository determined to be in default or insolvent.
"Default or insolvency" includes, but shall not be limited to, the failure or refusal of any qualified public depository to return any public deposit upon demand or at maturity and the issuance of an order of supervisory authority restraining such depository from making payments of deposit liabilities or the appointment of a receiver for such depository.
"Eligible collateral" means securities or instruments authorized as legal investments under the laws of the Commonwealth for public sinking funds or other public funds as well as Federal Home Loan Bank letters of credit issued in accordance with guidelines promulgated by the Treasury Board.
"Located in Virginia" means having a main office or branch office in the Commonwealth where deposits are accepted, checks are paid, and money is lent.
"Pooled method" means securing public deposits by accepting the contingent liability for the losses of public deposits of other qualified public depositories choosing this method, pursuant to §2.2-4403 and regulations and guidelines promulgated by the Treasury Board.
"Public deposit" means moneys held by a public depositor who is charged with the duty to receive or administer such moneys and is acting in an official capacity, such moneys being deposited in any of the following types of accounts: nonnegotiable time deposits, demand deposits, savings deposits, or any other transaction accounts.
"Public depositor" means the Commonwealth or any county, city, town or other political subdivision thereof, including any commission, institution, committee, board, or officer of the foregoing and any state court.
"Qualified escrow agent" means the State Treasurer or any bank or trust company approved by the Treasury Board to hold collateral pledged to secure public deposits.
"Qualified public depository" means any national
banking association, federal savings and loan association, or federal savings bank, or federal credit union
located in Virginia, any bank, credit union,
trust company, or savings institution
organized under Virginia law, or any state bank, credit
union, or savings institution organized under the laws of
another state located in Virginia authorized by the Treasury Board to hold
public deposits according to this chapter.
"Required collateral" of a qualified public depository means the amount of eligible collateral required to secure public deposits set by regulations or an action of the Treasury Board.
"Treasury Board" means the Treasury Board of the Commonwealth created by §2.2-2415.
§2.2-4405. Powers of Treasury Board relating to the administration of this chapter.
The Treasury Board shall have power to:
1. Make and enforce regulations and guidelines necessary and proper to the full and complete performance of its functions under this chapter;
2. Prescribe and enforce regulations and guidelines fixing terms and conditions consistent with this chapter under which public deposits must be secured;
3. Require additional collateral, in excess of the required collateral of any or all qualified public depositories as it may determine prudent under the circumstances;
4. Determine what securities or instruments shall be acceptable as eligible collateral, and fix the percentage of face value or market value of such securities or instruments that can be used to secure public deposits;
5. Establish guidelines to permit banks and credit unions to withdraw from the procedures for the payment of losses under §2.2-4403 and instead be governed by the procedures for the payment of losses under §2.2-4404, consistent with the primary purpose of protecting public deposits;
6. Require any qualified public depository to provide information concerning its public deposits as requested by the Treasury Board; and
7. Determine when a default or insolvency has occurred and to take such action as it may deem advisable for the protection, collection, compromise or settlement of any claim arising in case of default or insolvency.
§6.2-1302. Powers.
In addition to the powers specified or implied elsewhere in this chapter or in the laws of the Commonwealth, a credit union shall have the power to:
1. Enter into contracts;
2. Sue and be sued;
3. Adopt, use, and display a corporate seal;
4. Receive savings from and make loans and extend lines of credit to its members;
5. Individually or jointly with other credit unions acquire, lease as lessor or lessee, hold, assign, pledge, exchange, repair, mortgage, hypothecate, sell, discount, or otherwise dispose of property or assets, either in whole or in part, as necessary or incidental to its operations, including any property or assets obtained as a result of defaults under obligations owing to it;
6. Borrow from any source, provided that (i) a credit union shall notify and obtain prior approval of the Commissioner if the total borrowings will exceed 50 percent of the credit union's outstanding shares and (ii) in no event shall the borrowings exceed 90 percent of the credit union's outstanding shares;
7. Sell all or substantially all of its assets or purchase all or substantially all of the assets of another credit union, subject to the approval of the Commission;
8. Offer related financial services, including electronic fund transfers, share draft accounts, safe deposit boxes, leasing of tangible personal property to its members, and correspondent arrangements with other financial institutions;
9. Hold membership in other credit unions organized under this chapter or other applicable law, and in associations and organizations controlled by or fostering the interest of credit unions, including a central liquidity facility organized under state or federal law;
10. Contract with any licensed insurance company or society to insure the lives of its members to the extent of their loans and share accounts, in whole or in part, and to pay all or a portion of the premium therefor;
11. Engage in activities or programs as requested by any governmental authority, subject to the approval of the Commissioner;
12. Invest its funds, operate a business, manage or deal in property when such actions are reasonably necessary to avoid loss on a loan or investment previously made or an obligation previously created in good faith. Such property or business shall not be held or operated by the credit union for a period longer than is reasonably required to protect the interest of the credit union, unless specifically authorized by the Commissioner;
13. Make contributions to any nonprofit civic, charitable, or service organizations;
14. Make loans to its members and to other credit unions;
15. Engage in virtual currency custody services in the manner and to the extent provided in §6.2-1302.1;
16. Engage in any additional activity, service, or other
practice that is authorized for a federally chartered credit union and that has
not otherwise been authorized for a state-chartered credit union by the
provisions of this chapter or by Commission regulation, including regulations
adopted pursuant to subsection B of §6.2-1303, provided that (i) at least 45
calendar days prior to engaging in any such activity, service, or practice the
credit union provides the Commissioner with written notice along with any
additional information relating to the activity, service, or practice that the
Commissioner may require and (ii) the credit union engages in the activity,
service, or practice subject to the same terms, conditions, and limitations
that are applicable to a federally chartered credit union. The Commissioner may
at any time, based upon supervisory, legal, or safety and soundness
considerations, prohibit or further restrict the activity, service, or
practice. "Activity, service, or other practice" does not include
credit union field of membership or field of membership expansion under §§
6.2-1327 and 6.2-1328 and any related regulations; and
17. Hold public deposits; and
18. Undertake such other activities relating to the purposes of the credit union as its charter or bylaws may authorize, provided such activities are not inconsistent with this chapter.
§6.2-1327. Membership defined; field of membership.
A. The membership of a credit union shall consist of the incorporators, employees of such credit union, and other persons within the field of membership set forth in the bylaws as have: (i) been fully admitted into membership, (ii) paid any required entrance fee or annual membership fee, or both, (iii) subscribed for one or more shares, (iv) paid the initial installment thereon, and (v) complied with such other requirements as the articles of incorporation or bylaws specify.
B. Credit union membership shall be limited to persons within a specified field of membership, individuals within the immediate family or household of such persons, associations of such persons, other credit unions, and employees of the credit union. The field of membership specified shall be composed of one of the following:
1. A single group having a common bond of occupation or association;
2. More than one group, each of which has a common bond of occupation or association, and each of which does not exceed 3,000 members at the time it is proposed to be included in a multiple common-bond credit union. The 3,000-member limitation shall not apply if the Commission determines that an exception on the grounds provided in subsection (d) (2) or (d) (3) of §101 of the Credit Union Membership Access Act (12 U.S.C. §1759) is appropriate. In making any determination under this provision, the Commission shall give consideration to the National Credit Union Administration guidelines; or
3. Those persons or organizations within a well-defined local community, neighborhood or rural district.
The Commission shall in its discretion determine whether a proposed field of membership constitutes a "well-defined local community, neighborhood or rural district." In making such determination, the Commission shall give consideration to the definition of the term that has been adopted by the National Credit Union Administration and has become legally effective.
C. Except as the board of directors may provide to the contrary in the bylaws with respect to termination of membership, once a person or entity becomes a member of a credit union in accordance with this chapter, that person or entity may remain a member of that credit union until the person or entity chooses to withdraw from the credit union.
D. The board of directors may expel from the credit union any member who: (i) has not carried out his obligations to the credit union; (ii) has been convicted of a criminal offense; (iii) neglects or refuses to comply with the provisions of this chapter or of the bylaws; (iv) neglects to pay his debts, or otherwise causes financial loss to the credit union; or (v) has deceived the credit union with regard to the use of borrowed money. No member shall be so expelled until he has been informed in writing of the charges against him, and an opportunity has been given to him, after reasonable notice, to be heard.
E. Members of the credit union shall not be personally liable for payment of the debts of the credit union.
F. The surviving spouse of a deceased credit union member shall be eligible to become a member of the credit union to which the deceased member belonged. In no other instance shall an individual be eligible for membership in a credit union on the basis of the individual's relationship to another person who is eligible for membership in the credit union, unless the individual is a member of the immediate family or household of such person. The board of directors of a credit union may provide in the bylaws for a less inclusive policy governing membership by virtue of relationship to another person, and such policy shall be effective.
G. Societies, associations, organizations, partnerships, and corporations composed of persons who are eligible for membership may be admitted to membership in the same manner and under the same conditions as such persons.
H. The Commonwealth or any county, city, town, or other political subdivision thereof, including any commission, institution, committee, board, or officer of the foregoing, and any state court may become members of a credit union for purposes of placing deposits in and receiving services from the credit union.
I. Any individual or entity that was a member of a credit union as of July 1, 1999, may remain a member of the credit union after that date, and any group that was included in the field of membership of a credit union on that date may remain within the field of membership of that credit union after that date. The successor of an entity that was a member or was eligible for membership in a credit union or for inclusion in a field of membership on July 1, 1999, retains the status of its predecessor.
§58.1-3149. Money received to be deposited.
All money received by a treasurer for the account of either the Commonwealth or the treasurer's county or city shall be deposited intact by the treasurer as promptly as practical after its receipt in a bank, credit union, or savings institution authorized to act as depository therefor. All deposits made pursuant to this provision shall be made in the name of the treasurer's county or city. The treasurer may designate any bank, credit union, or savings and loan association authorized to act as a depository to receive any payments due to the county or city directly, either through a processing facility or through a branch office.
2. That the Treasury Board shall designate a rating service to evaluate the creditworthiness of any credit union seeking to become a qualified public depository, as defined in §2.2-4401 of the Code of Virginia, as amended by this act, within 180 days of the enactment of this act.
3. That the Treasury Board shall promulgate emergency regulations to implement the provisions of the first enactment of this act to be effective within 280 days of its enactment. Neither the provisions of the Administrative Process Act (§2.2-4000 et seq.) of the Code of Virginia nor public participation guidelines adopted pursuant thereto shall apply to the initial adoption of any regulations promulgated pursuant to this act.
