1.1                          A bill for an act 
  1.2             relating to financial institutions; providing for the 
  1.3             organization, operation, and regulation of credit 
  1.4             unions; amending Minnesota Statutes 2000, sections 
  1.5             52.02, subdivisions 2, 3; 52.04, subdivision 3; 52.05, 
  1.6             subdivisions 1, 2; 52.09, subdivision 3; 52.12; 52.15, 
  1.7             subdivision 1; 52.19, subdivision 2; Minnesota 
  1.8             Statutes 2001 Supplement, section 52.04, subdivision 
  1.9             1; proposing coding for new law in Minnesota Statutes, 
  1.10            chapter 52. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  [52.001] [DEFINITIONS.] 
  1.13     Subdivision 1.  [APPLICATION.] For purposes of this 
  1.14  chapter, the terms defined in this section have the meanings 
  1.15  given. 
  1.16     Subd. 2.  [BOARD.] "Board" means the board of directors of 
  1.17  a credit union. 
  1.18     Subd. 3.  [COMMISSIONER.] "Commissioner" means the 
  1.19  commissioner of the department of commerce. 
  1.20     Subd. 4.  [CREDIT UNION.] "Credit union" means a 
  1.21  cooperative, not-for-profit financial institution formed and 
  1.22  operating under this chapter. 
  1.23     Subd. 5.  [COMMUNITY.] "Community" means an identifiable 
  1.24  neighborhood, community, rural district, or other geographically 
  1.25  well-defined area in which individuals have common interests or 
  1.26  interact.  "Well-defined" means the proposed area has specific 
  1.27  geographic boundaries, including a school district, city, 
  1.28  township, county, or clearly identifiable neighborhood, but does 
  2.1   not include the state as a whole. 
  2.2      Subd. 6.  [DIRECTOR.] "Director" means a member of the 
  2.3   board. 
  2.4      Subd. 7.  [FEDERAL CREDIT UNION.] "Federal credit union" 
  2.5   means a credit union organized and operating under the laws of 
  2.6   the United States. 
  2.7      Subd. 8.  [INSOLVENT.] "Insolvent" means the condition that 
  2.8   results when the cash value of assets realizable in a reasonable 
  2.9   period of time is less than the liabilities that must be met 
  2.10  within that time. 
  2.11     Subd. 9.  [MEMBER.] "Member" means a person whose 
  2.12  application for membership has been approved as meeting the 
  2.13  membership criteria of the credit union, who has paid any 
  2.14  required entrance or membership fee, and who has paid for one or 
  2.15  more shares. 
  2.16     Subd. 10.  [ORGANIZATION.] "Organization" means any 
  2.17  corporation, association, partnership, limited liability 
  2.18  company, cooperative, trust, or other legal entity. 
  2.19     Subd. 11.  [OUT-OF-STATE CREDIT UNION.] "Out-of-state 
  2.20  credit union" means a credit union organized under the laws of 
  2.21  another state or United States territory or possession. 
  2.22     Subd. 12.  [SMALL GROUP.] "Small group" means a group that 
  2.23  has less than 3,000 potential members that has made a written 
  2.24  request to a credit union for credit union services. 
  2.25     Subd. 13.  [UNSAFE OR UNSOUND PRACTICE.] "Unsafe or unsound 
  2.26  practice" means any action or lack of action that is contrary to 
  2.27  generally accepted standards of prudent operation and that poses 
  2.28  an abnormal risk of loss to the credit union or its members. 
  2.29     Sec. 2.  Minnesota Statutes 2000, section 52.02, 
  2.30  subdivision 2, is amended to read: 
  2.31     Subd. 2.  [BYLAW AMENDMENTS BY DIRECTORS.] The bylaws 
  2.32  themselves, or the members ~~may~~, pursuant to subdivision 1, may 
  2.33  provide for the bylaws to be amended by the board of directors.  
  2.34  If the bylaws permit amendment by the directors, any amendments 
  2.35  shall be approved by a two-thirds vote of the total number of 
  2.36  directors authorized.  The board of directors shall not adopt, 
  3.1   amend, or repeal a bylaw fixing a quorum for meetings of 
  3.2   members, prescribing procedures for removing directors or 
  3.3   filling vacancies in the board, or fixing the number of 
  3.4   directors or their classifications, qualifications, or terms of 
  3.5   office, but may adopt or amend a bylaw to increase the number of 
  3.6   directors.  If three percent or more of all members propose a 
  3.7   resolution for action by the members to adopt, amend, or repeal 
  3.8   bylaws adopted, amended, or repealed by the board and the 
  3.9   resolution sets forth the provisions proposed for adoption, 
  3.10  amendment, or repeal, the resolution shall be submitted to the 
  3.11  members for a vote as provided in subdivision 1.  
  3.12     Sec. 3.  Minnesota Statutes 2000, section 52.02, 
  3.13  subdivision 3, is amended to read: 
  3.14     Subd. 3.  [APPROVAL.] Amendments to the certificate of 
  3.15  organization or bylaws, other than the addition of a small group 
  3.16  to the field of membership, must be approved by the commissioner 
  3.17  of commerce before they become operative.  The commissioner 
  3.18  shall not unreasonably withhold approval if the amendments do 
  3.19  not violate any provision of this chapter or other state law.  
  3.20  In any event, the commissioner shall approve or disapprove the 
  3.21  proposed amendment within 60 days of the date the proposed 
  3.22  amendment is submitted to the commissioner by the credit union.  
  3.23  In case of disapproval the credit union shall have the right to 
  3.24  appeal to a court of competent jurisdiction within the time 
  3.25  limits stated in section 52.01, clause (6).  In case any 
  3.26  amendment to the certificate of organization is adopted, the 
  3.27  resolution, containing a full text of the amendment and verified 
  3.28  by its president or treasurer and approved by the commissioner 
  3.29  of commerce, shall be recorded in the office of the secretary of 
  3.30  state.  Upon addition of a small group to the field of 
  3.31  membership, a credit union must provide timely written notice to 
  3.32  the commissioner.  The commissioner shall have 30 days from 
  3.33  receipt of the notice to reject the addition of the small group; 
  3.34  if the commissioner does not reject the addition within that 
  3.35  period, it is deemed approved.  
  3.36     Sec. 4.  Minnesota Statutes 2001 Supplement, section 52.04, 
  4.1   subdivision 1, is amended to read: 
  4.2      Subdivision 1.  A credit union has the following powers: 
  4.3      (1) to offer its members and other credit unions various 
  4.4   classes of shares, share certificates, deposits, or deposit 
  4.5   certificates; 
  4.6      (2) to receive the savings of its members either as payment 
  4.7   on shares or as deposits, including the right to conduct 
  4.8   Christmas clubs, vacation clubs, and other thrift organizations 
  4.9   within its membership.  Trust funds received by a real estate 
  4.10  broker or the broker's salespersons in trust may be deposited in 
  4.11  a credit union; 
  4.12     (3) to make loans to members for provident or productive 
  4.13  purposes as provided in section 52.16; 
  4.14     (4) to make loans to a cooperative society or other 
  4.15  organization having membership in the credit union; 
  4.16     (5) to deposit in state and national banks and trust 
  4.17  companies authorized to receive deposits; 
  4.18     (6) to invest in any investment legal for savings banks or 
  4.19  for trust funds in the state and, notwithstanding clause (3), to 
  4.20  invest in and make loans of unsecured days funds (federal funds 
  4.21  or similar unsecured loans) to financial institutions insured by 
  4.22  an agency of the federal government and a member of the Federal 
  4.23  Reserve System or required to maintain reserves at the Federal 
  4.24  Reserve; 
  4.25     (7) to borrow money as hereinafter indicated; 
  4.26     (8) to adopt and use a common seal and alter the same at 
  4.27  pleasure; 
  4.28     (9) to make payments on shares of and deposit with any 
  4.29  other credit union chartered by this or any other state or 
  4.30  operating under the provisions of the Federal Credit Union Act, 
  4.31  in amounts not exceeding in the aggregate 25 percent of its 
  4.32  unimpaired assets.  However, payments on shares of and deposit 
  4.33  with credit unions chartered by other states are restricted to 
  4.34  credit unions insured by the National Credit Union 
  4.35  Administration.  The restrictions imposed by this clause do not 
  4.36  apply to share accounts and deposit accounts of the Minnesota 
  5.1   corporate credit union in United States central credit union or 
  5.2   to share accounts and deposit accounts of credit unions in the 
  5.3   Minnesota corporate credit union; 
  5.4      (10) to contract with any licensed insurance company or 
  5.5   society to insure the lives of members to the extent of their 
  5.6   share accounts, in whole or in part, and to pay all or a portion 
  5.7   of the premium therefor; 
  5.8      (11) to indemnify each director, officer, or committee 
  5.9   member, or former director, officer, or committee member against 
  5.10  all expenses, including attorney's fees but excluding amounts 
  5.11  paid pursuant to a judgment or settlement agreement, reasonably 
  5.12  incurred in connection with or arising out of any action, suit, 
  5.13  or proceeding to which that person is a party by reason of being 
  5.14  or having been a director, officer, or committee member of the 
  5.15  credit union, except with respect to matters as to which that 
  5.16  person is finally adjudged in the action, suit, or proceeding to 
  5.17  be liable for negligence or misconduct in the performance of 
  5.18  duties.  The indemnification is not exclusive of any other 
  5.19  rights to which that person may be entitled under any bylaw, 
  5.20  agreement, vote of members, or otherwise; 
  5.21     (12) upon written authorization from a member, retained at 
  5.22  the credit union, to make payments to third parties by 
  5.23  withdrawals from the member's share or deposit accounts or 
  5.24  through proceeds of loans made to such member, or by permitting 
  5.25  the credit union to make those payments from the member's funds 
  5.26  prior to deposit; to permit draft withdrawals from member 
  5.27  accounts, but a credit union proposing to permit draft 
  5.28  withdrawals shall notify the commissioner of commerce, in the 
  5.29  form prescribed, of its intent not less than 90 days prior to 
  5.30  authorizing draft withdrawals.  The board of directors of a 
  5.31  credit union may restrict one class of shares to the extent that 
  5.32  it may not be redeemed, withdrawn, or transferred except upon 
  5.33  termination of membership in the credit union; 
  5.34     (13) to inform its members as to the availability of 
  5.35  various group purchasing plans which are related to the 
  5.36  promotion of thrift or the borrowing of money for provident and 
  6.1   productive purposes by means of informational materials placed 
  6.2   in the credit union's office, through its publications, or by 
  6.3   direct mailings to members by the credit union; 
  6.4      (14) to facilitate its members' voluntary purchase of types 
  6.5   of insurance incidental to promotion of thrift or the borrowing 
  6.6   of money for provident and productive purposes including, but 
  6.7   not limited to the following types of group or individual 
  6.8   insurance:  Fire, theft, automobile, life and temporary 
  6.9   disability; to be the policy holder of a group insurance plan or 
  6.10  a subgroup under a master policy plan and to disseminate 
  6.11  information to its members concerning the insurance provided 
  6.12  thereunder; to remit premiums to an insurer or the holder of a 
  6.13  master policy on behalf of a credit union member, if the credit 
  6.14  union obtains written authorization from the member for 
  6.15  remittance by share or deposit withdrawals or through proceeds 
  6.16  of loans made by the members, or by permitting the credit union 
  6.17  to make the payments from the member's funds prior to deposit; 
  6.18  and to accept from the insurer reimbursement for expenses 
  6.19  incurred ~~or in the case of credit life, accident and health, and~~ 
  6.20  ~~involuntary unemployment insurance within the meaning of chapter~~ 
  6.21  ~~62B~~ and commissions for the handling of the insurance.  The 
  6.22  amount reimbursed or the commissions received may constitute the 
  6.23  general income of the credit union.  The directors, officers, 
  6.24  committee members and employees of a credit union shall not 
  6.25  profit on any insurance sale facilitated through the credit 
  6.26  unions; 
  6.27     (15) to contract with another credit union to furnish 
  6.28  services which either could otherwise perform.  Contracted 
  6.29  services under this clause are subject to regulation and 
  6.30  examination by the commissioner of commerce like other services; 
  6.31     (16) in furtherance of the twofold purpose of promoting 
  6.32  thrift among its members and creating a source of credit for 
  6.33  them at legitimate rates of interest for provident purposes, and 
  6.34  not in limitation of the specific powers hereinbefore conferred, 
  6.35  to have all the powers enumerated, authorized, and permitted by 
  6.36  this chapter, and such other rights, privileges and powers 
  7.1   incidental to, or necessary or convenient for, the 
  7.2   accomplishment of the objectives and purposes of the credit 
  7.3   union; 
  7.4      (17) to rent safe deposit boxes to its members if the 
  7.5   credit union obtains adequate insurance or bonding coverage for 
  7.6   losses which might result from the rental of safe deposit boxes; 
  7.7      (18) notwithstanding the provisions of section 52.05, to 
  7.8   accept deposits of public funds in an amount secured by 
  7.9   insurance or other means pursuant to chapter 118A or section 
  7.10  9.031 or other applicable law and to receive deposits of trust 
  7.11  funds and offer related trust services provided that either the 
  7.12  provider ~~or the~~, beneficial owner, or trustee of the funds is a 
  7.13  member of the credit union accepting the deposit.  Prior to 
  7.14  offering trust-related services, a credit union must receive 
  7.15  approval from the commissioner under sections 48.36 to 48.41; 
  7.16     (19) to accept and maintain treasury tax and loan accounts 
  7.17  of the United States and to pledge collateral to secure the 
  7.18  treasury tax or loan accounts, in accordance with the 
  7.19  regulations of the Department of Treasury of the United States; 
  7.20     (20) to accept deposits pursuant to section 149A.97, 
  7.21  subdivision 5, notwithstanding the provisions of section 52.05, 
  7.22  if the deposits represent funding of prepaid funeral plans of 
  7.23  members; 
  7.24     (21) to sell, in whole or in part, real estate secured 
  7.25  loans provided that:  
  7.26     (a) the loan is secured by a first lien; 
  7.27     (b) the board of directors approves the sale; 
  7.28     (c) if the sale is partial, the agreement to sell a partial 
  7.29  interest shall, at a minimum:  
  7.30     (i) identify the loan or loans covered by the agreement; 
  7.31     (ii) provide for the collection, processing, remittance of 
  7.32  payments of principal and interest, taxes and insurance premiums 
  7.33  and other charges or escrows, if any; 
  7.34     (iii) define the responsibilities of each party in the 
  7.35  event the loan becomes subject to collection, loss or 
  7.36  foreclosure; 
  8.1      (iv) provide that in the event of loss, each owner shall 
  8.2   share in the loss in proportion to its interest in the loan or 
  8.3   loans; 
  8.4      (v) provide for the distribution of payments of principal 
  8.5   to each owner proportionate to its interest in the loan or 
  8.6   loans; 
  8.7      (vi) provide for loan status reports; 
  8.8      (vii) state the terms and conditions under which the 
  8.9   agreement may be terminated or modified; and 
  8.10     (d) the sale is without recourse or repurchase unless the 
  8.11  agreement:  
  8.12     (i) requires repurchase of a loan because of any breach of 
  8.13  warranty or misrepresentation; 
  8.14     (ii) allows the seller to repurchase at its discretion; or 
  8.15     (iii) allows substitution of one loan for another; 
  8.16     (22) in addition to the sale of loans secured by a first 
  8.17  lien on real estate, to sell, pledge, discount, or otherwise 
  8.18  dispose of, in whole or in part, to any source, a loan or group 
  8.19  of loans, other than a self-replenishing line of credit; 
  8.20  provided, that within a calendar year beginning January 1 the 
  8.21  total dollar value of loans sold, other than loans secured by 
  8.22  real estate or insured by a state or federal agency, shall not 
  8.23  exceed 25 percent of the dollar amount of all loans and 
  8.24  participating interests in loans held by the credit union at the 
  8.25  beginning of the calendar year, unless otherwise authorized in 
  8.26  writing by the commissioner; 
  8.27     (23) to designate the par value of the shares of the credit 
  8.28  union by board resolution; 
  8.29     (24) to exercise by resolution the powers set forth in 
  8.30  United States Code, title 12, section 1757.  Before exercising 
  8.31  each power, the board must submit a plan to the commissioner of 
  8.32  commerce detailing implementation of the power to be used; 
  8.33     (25) to offer self-directed individual retirement accounts 
  8.34  and Keogh accounts and act as custodian and trustee of these 
  8.35  accounts if: 
  8.36     (1) all contributions of funds are initially made to a 
  9.1   deposit, share or share certificate account in the credit union; 
  9.2      (2) any subsequent transfer of funds to other assets is 
  9.3   solely at the direction of the member and the credit union 
  9.4   exercises no investment discretion and provides no investment 
  9.5   advice with respect to plan assets; and 
  9.6      (3) the member is clearly notified of the fact that 
  9.7   National Credit Union Share Insurance Fund coverage is limited 
  9.8   to funds held in deposit, share or share certificate accounts of 
  9.9   National Credit Union Share Insurance Fund-insured credit 
  9.10  unions; 
  9.11     (26) to impose reasonable charges for the services it 
  9.12  provides to its members; 
  9.13     (27) to impose financing charges and reasonable late 
  9.14  charges in the event of default on loans, and recover reasonable 
  9.15  costs and expenses, including, but not limited to, actual 
  9.16  collection costs and attorneys' fees incurred both before and 
  9.17  after judgment, incurred in the collection of sums due, if 
  9.18  provided for in the note or agreement signed by the borrower; 
  9.19     (28) to acquire, lease, hold, assign, pledge, sell, or 
  9.20  otherwise dispose of interests in personal property and in real 
  9.21  property; 
  9.22     (29) to acquire, lease, hold, assign, pledge, sell, or 
  9.23  otherwise dispose of interests in a loan or groups of loans 
  9.24  other than a self-replenishing line of credit; and 
  9.25     (30) to enter into lease agreements, lease contracts, and 
  9.26  lease-purchase agreements with members, provided that a credit 
  9.27  union must comply with section 48.152 in leasing personal 
  9.28  property to members. 
  9.29     Sec. 5.  Minnesota Statutes 2000, section 52.04, 
  9.30  subdivision 3, is amended to read: 
  9.31     Subd. 3.  [~~COMPARABILITY WITH FEDERAL CREDIT UNIONS~~ 
  9.32  PARITY.] ~~The commissioner of commerce may authorize credit union~~ 
  9.33  ~~activity in which credit unions subject to the jurisdiction of~~ 
  9.34  ~~the federal government may be authorized to engage by federal~~ 
  9.35  ~~legislation, ruling, or regulation.~~  Notwithstanding any other 
  9.36  provision of law, and in addition to all powers and activities, 
 10.1   express, implied, or incidental, that a credit union has under 
 10.2   the laws of this state, a credit union may exercise the powers 
 10.3   and activities of a federal credit union, upon approval of the 
 10.4   commissioner.  The commissioner must approve or deny a request 
 10.5   under this subdivision within 60 days after submission of the 
 10.6   request by a credit union.  The commissioner may not authorize 
 10.7   state credit unions subject to this chapter to engage in credit 
 10.8   union activity prohibited by the laws of this state. 
 10.9      Sec. 6.  Minnesota Statutes 2000, section 52.05, 
 10.10  subdivision 1, is amended to read: 
 10.11     Subdivision 1.  [REQUIREMENTS.] Credit union membership 
 10.12  consists of the incorporators and other persons as may be 
 10.13  elected to membership and subscribe to at least one share as 
 10.14  designated by the board of directors, pay the initial 
 10.15  installment thereon and the entrance fee if any.  In addition to 
 10.16  a regularly qualified member, the spouse of a member, the blood 
 10.17  or adoptive relatives of either of them and their spouses may be 
 10.18  members.  When an individual member of a credit union leaves the 
 10.19  field of membership, the member, and all persons who became 
 10.20  members by virtue of that individual's membership may continue 
 10.21  as members.  The surviving spouse of a regularly qualified 
 10.22  member, and the blood or adoptive relatives of either of them 
 10.23  and their spouses may become members.  Organizations, 
 10.24  incorporated or otherwise, composed for the most part of the 
 10.25  same general group as the credit union membership may be 
 10.26  members.  Credit unions chartered by this or any other state, or 
 10.27  any federal credit union may be members.  Credit union 
 10.28  organizations shall be limited to persons within one or more 
 10.29  groups or any combination of groups~~, of both large and small~~ 
 10.30  ~~membership,~~ having a common bond of occupation, ~~or~~ association, 
 10.31  or ~~to residents within a well-defined neighborhood,~~ community~~,~~ 
 10.32  ~~or rural district~~. 
 10.33     Sec. 7.  Minnesota Statutes 2000, section 52.05, 
 10.34  subdivision 2, is amended to read: 
 10.35     Subd. 2.  [APPLICATION.] Any two persons representing a 
 10.36  group of 30 or less or any 15 persons representing a larger 
 11.1   group may apply to the commissioner, advising the commissioner 
 11.2   of the common bond of the group and its number of potential 
 11.3   members, for a determination whether it is feasible for the 
 11.4   group to form a credit union.  Upon a determination that it is 
 11.5   not feasible to organize because the number of potential members 
 11.6   is too small, the applicants will be certified by the 
 11.7   commissioner as eligible to petition for membership in an 
 11.8   existing credit union capable of serving the group.  If the 
 11.9   credit union so petitioned resolves to accept the group into 
 11.10  membership, it shall follow the bylaw amendment and approval 
 11.11  procedure set forth in section 52.02.  
 11.12     The commissioner ~~shall~~ may adopt rules to implement this 
 11.13  subdivision.  If adopted, these rules must provide that: 
 11.14     (1) for the purpose of this subdivision, groups with a 
 11.15  potential membership of less than ~~1,500~~ 3,000 will be considered 
 11.16  too small to be feasible as a separate credit union, unless 
 11.17  there are compelling reasons to the contrary, relevant to the 
 11.18  objectives of this subdivision; 
 11.19     (2) groups with a potential membership in excess of ~~1,500~~ 
 11.20  3,000 will be considered in light of all circumstances relevant 
 11.21  to the objectives of this subdivision; and 
 11.22     (3) all group applications, except for applications from 
 11.23  groups made up of members of existing credit unions or groups 
 11.24  made up of people who have a common employer which qualifies 
 11.25  them for membership in an existing credit union, will be 
 11.26  considered separately from any consideration of the membership 
 11.27  provisions of existing credit unions; except that, groups made 
 11.28  up of members of an existing credit union may be certified under 
 11.29  this subdivision with the agreement of the credit union. 
 11.30     Sec. 8.  Minnesota Statutes 2000, section 52.09, 
 11.31  subdivision 3, is amended to read: 
 11.32     Subd. 3.  [OFFICERS, BYLAWS; COMPENSATION.] The duties of 
 11.33  the officers shall be as determined in the bylaws, except that 
 11.34  the treasurer may be the general manager.  No member of the 
 11.35  board, the supervisory committee or an elected credit committee 
 11.36  shall receive a salary as such, but may be reimbursed for 
 12.1   necessary expenses incidental to serving in such capacity and 
 12.2   may be compensated for time actually spent in official duties at 
 12.3   an hourly rate as determined by the annual meeting of 
 12.4   members.  Provision of reasonable life, health, accident, and 
 12.5   similar insurance protection shall not be considered 
 12.6   compensation. 
 12.7      Sec. 9.  Minnesota Statutes 2000, section 52.12, is amended 
 12.8   to read: 
 12.9      52.12 [CAPITAL; ENTRANCE FEES; CREDIT UNION TO HAVE LIEN.] 
 12.10     The capital of a credit union includes shares, share 
 12.11  certificates, any special class of shares, undivided earnings, 
 12.12  reserves, member investment shares, nonmember subordinated debt, 
 12.13  member paid-in capital, and any entrance or membership fees.  
 12.14  The credit union shall have a lien on the shares and deposits of 
 12.15  a member for any sum due to the credit union from the member, or 
 12.16  for any loan endorsed by that member.  In addition to any other 
 12.17  statutory right of setoff or lien and subject to any contractual 
 12.18  provision, if any party to an account is indebted to a credit 
 12.19  union, the credit union has a right to setoff against any 
 12.20  account in which the party has or had immediately before death a 
 12.21  present right of withdrawal.  A credit union may, at its 
 12.22  discretion, charge an entrance or annual membership fee if 
 12.23  authorized by the bylaws. 
 12.24     Sec. 10.  Minnesota Statutes 2000, section 52.15, 
 12.25  subdivision 1, is amended to read: 
 12.26     Subdivision 1.  [~~40~~ FIFTY PERCENT OF UNIMPAIRED ASSETS.] A 
 12.27  credit union may borrow from any source, or sources, sums not 
 12.28  exceeding in the aggregate ~~40~~ 50 percent of its unimpaired 
 12.29  assets.  For the purposes of this subdivision, "unimpaired 
 12.30  assets" mean total assets less borrowings, including all forms 
 12.31  of indebtedness, accounts payable, and any amount by which 
 12.32  reserves and undivided earnings will not be adequate to meet the 
 12.33  reserve requirements caused by classified assets.  
 12.34     Sec. 11.  Minnesota Statutes 2000, section 52.19, 
 12.35  subdivision 2, is amended to read: 
 12.36     Subd. 2.  The board of directors may adopt a procedure and 
 13.1   policy for expulsion of members for cause and for 
 13.2   nonparticipation in the affairs of the credit union.  
 13.3   The nonparticipation policy must be based on:  
 13.4      (1) failure to purchase and maintain at least one credit 
 13.5   union share or to pay entrance or membership fees, if any; or 
 13.6      (2) causing monetary loss to the credit union. 
 13.7   If adopted, written notice of the procedure and policy and their 
 13.8   effective date shall be mailed not less than 30 days before 
 13.9   their effective date to each member of the credit union at the 
 13.10  member's address on the credit union records.  Each new member 
 13.11  shall be provided written notice of the procedure and policy 
 13.12  before or upon applying for membership.