§ 7-9-6. Formation of corporation to conduct credit union -- Approval of commissioner.

(1)

(a) Ten or more incorporators belonging to the same group of 200 persons or more having a field of membership may, with the approval of the commissioner, form a corporation to conduct a credit union under:

(i) this chapter;

(ii) Title 16, Chapter 10a, Utah Revised Business Corporation Act; and

(iii) Chapter 1, General Provisions.

(b) This chapter takes precedence over conflicting provisions of other state law governing:

(i) the formation of the corporation; and

(ii) the duties and obligations of:

(A) the corporation;

(B) the corporation's officers; and

(C) the corporation's shareholders or members.

(2) The commissioner may grant the approval referenced in Subsection (1) if the commissioner finds that:

(a) the proposed field of membership is favorable to the success of the credit union;

(b) the standing of the proposed membership will give assurance that its affairs will be administered in accordance with this chapter;

(c) the proposed credit union has a reasonable promise of financial viability; and

(d) formation of the credit union would not result in a substantial adverse financial impact on an existing credit union having the same or substantially the same field of membership.

(3)

(a) Except as provided in Subsection (3)(b) and in addition to the requirements of Subsections (1) and (2), Section 7-1-704 governs the formation of a credit union.

(b) Notwithstanding Subsection (3)(a):

(i) if the proposed credit union has a field of membership that does not base eligibility on residence in a county, the persons seeking formation of the proposed credit union are not required to provide the notice required under Subsection 7-1-704(3); and

(ii) a credit union may not be required to obtain federal insurance if the credit union complies with Subsection 7-9-45(2).

Amended by Chapter 327, 2003 General Session